TOKYO, Dec 1 (Reuters) – Benchmark Tokyo rubber futures closed 3 percent higher on Thursday, following a near 5-percent tumble in the previous session, as oil prices rallied after OPEC cut a deal to reduce output and on a weaker yen against the dollar. Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, extended gains in the afternoon to more than 4 percent after Shanghai futures erased early losses of nearly 3 percent, and gained over 1 percent in about the last hour of trading.
Oil prices shot up 13 percent, smashing trading volume records, after OPEC and Russia cut a deal to reduce output to drain a global supply glut, but analysts warned they could remain modest by historical comparison as other producers fill the gap. O/R The dollar touched a 9-1/2-month high against the yen, as oil prices surged – lifting inflation expectations and U.S.bond yields.
USD/ The Tokyo Commodity Exchange rubber contract for May delivery JRUc6 0#2JRU: finished up 6.8 yen at 234.9 yen per kg. “TOCOM looks like it is on a rising momentum again, though heavy speculative positions on Shanghai piled up, weighing on Shanghai,” said a Tokyo-based broker.
The most-active rubber contract on the Shanghai futures exchange for May delivery SNRcv1 fell 130 yuan to finish at 18,085 yuan per tonne.Earlier in the session, it touched 17,745 yuan, its lowest since Nov. 21. An exodus of cash from steel to rubber to zinc threatened a blistering months-long rally across global commodity markets on Wednesday, triggered by fresh concerns about liquidity in China, the world’s second largest economy.
The front-month rubber contract on Singapore’s SICOM exchange for January delivery STFc1 last traded at 172 U.S. cents per kg, up 2.5 cents.
(Reporting by Osamu Tsukimori; Editing by Sherry Jacob-Phillips)
