TOKYO, Dec 25 (Reuters) – Benchmark Tokyo rubber futures rose 1.6 percent on Tuesday to hit a three-month high on a weaker yen, with some participants forecasting more gains as the year ends.
The yen hit a 20-month low against the dollar on Tuesday as Japan’s incoming prime minister raised the pressure on the Bank of Japan (BOJ) to easy monetary policy.
The weaker yen makes the dollar-based commodity expensive and usually encourages players to take speculative buying positions in TOCOM rubber.
The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for June delivery rose 4.7 yen to settle at 292.3 yen ($3.45) per kg.
The contract jumped 1.7 percent to 292.4 yen in afternoon trade, the highest since it hit 294.7 on May 11.
Dealers said TOCOM rubber was likely to rise further this week as technical sentiment improved after having found a support level at 285 yen.
“As the yen weakened, the funds have stuck to their long positions, and the suspected short-covering took place amid thin trading,” said a Tokyo-based broker who declined to be named.
“There still seems to be some room for more upside, and prices could rise to around 300 yen at the end of the year on factors that are mostly technical.”
The most active rubber contract on the Shanghai futures exchange for May delivery rose 210 yuan to finish at 25,250 yuan ($4,100) per tonne.
Trading in futures on Singapore’s SICOM exchange was halted due to the Christmas holiday.
Indian natural rubber futures are likely to remain steady this week, near two-and-half-year lows hit last week, as farmers trim supplies in response to lower prices and sluggish buying by tyre-makers.
($1 = 6.2335 Chinese yuan) ($1 = 84.7950 Japanese yen)
(Reporting by Osamu Tsukimori; Editing by Daniel Magnowski)
Source: Reuters
