TOKYO, July 4 (Reuters) – Benchmark TOCOM rubber futures rose to a nearly one-month high on Monday on firmer crude oil prices and diminishing anxiety over Britain’s vote to leave the European Union, but worries over softer demand in top buyer China capped gains.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for December delivery JRUc6 0#2JRU: was up 2.2 yen, or 1.4 percent, at 158.0 yen ($1.54) per kg as of 0033 GMT, after touching a high of 158.6 yen -its strongest since June 7. It closed a tad lower last Friday, but ended the week with a 2.8-percent rise, which marked a third weekly gain.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.4 percent from the prior Friday, the exchange said on Friday.
China’s factories flatlined in June as exports shrank and jobs were cut, a worrying trend evident across Asia that argues for yet more policy stimulus as doubts gather over the potency of measures taken so far.
Japanese companies’ inflation expectations fell slightly in June from three months ago, the Bank of Japan’s tankan survey showed, adding to growing doubts over its argument that aggressive money printing will speed price growth to its 2 percent goal.
British finance minister George Osborne is planning to cut corporation tax to less than 15 percent in an attempt to offset the shock to investors of the country’s decision to leave the EU, the Financial Times reported on Sunday.
MARKET NEWS
Crude prices extended gains on Monday in Asia, supported by comments from the Saudi energy minister saying the oil market is heading towards balance. O/R
The U.S. dollar was steady at 102.48 yen JPY= early on Monday after the chances of a U.S.rate hike from the Federal Reserve receded and Britain’s central bank hinted at a rate cut and more stimulus in the months ahead.
Japan’s benchmark Nikkei stock average (XC0009692440) was down 0.6 percent in Monday trade despite gains in European and the U.S.shares on Friday.
DATA/EVENTS (GMT)
The following data is expected on Monday: (Time in GMT)
0830 Euro zone Sentix index Jul
0900 Euro zone Producer prices May U.S. markets shut on Monday for Independence Day holiday
($1 = 102.5500 yen)
(Reporting by Yuka Obayashi; Editing by Joseph Radford)
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