TOKYO, April 24 (Reuters) – Benchmark Tokyo rubber futures closed higher on Wednesday after a two-day losing streak prompted bargain-hunting, with prices tracking stronger share prices in Asia.
A dip in the yen toward the 100 level to the dollar was also supportive.
A weaker yen inflates Tokyo futures prices relative to dollar-based prices in producing countries and often encourages speculative buying.
“The TOCOM market simply followed higher equity prices and a fall in the yen,” said Toshitaka Tazawa, an analyst at commodity brokerage Fujitomi Co.
“But the demand side looks gloomy,” he said, adding that further fall in the commodity’s demand is possible if a big earthquake and the spread of a bird flu in China undermine the world’s second-biggest economy.
The newly listed benchmark Tokyo Commodity Exchange rubber contract for October delivery settled at 258.3 yen ($2.6) per kg, up 4.6 yen or 1.8 percent from its opening at 253.7 yen.
The previous benchmark September contract closed up 7.5 yen at 256.7 yen. The September contract hit a five-month low of 242.6 yen on April 18 as weak gross domestic product data from China, the world’s biggest rubber user, fuelled demand concerns.
Trade was somewhat limited ahead of Japan’s Golden Week holiday season starting next week. The TOCOM market is closed on April 29, May 3 and May 6.
The most-active rubber contract on the Shanghai futures exchange for September delivery rose 395 yuan to 18,965 yuan ($3,100) per tonne, helped by a rally in Chinese equity prices.
The contract touched a 3-1/2 year low of 18,210 yuan on Tuesday after data showing growth in China’s vast factory sector dipped in April, suggesting the Chinese economy still faces formidable global headwinds into the second quarter.
The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 240.50 U.S. cents per kg, up 2 cents.
($1 = 99.3600 Japanese yen)
($1 = 6.1791 Chinese yuan)
(Reporting by Risa Maeda; Editing by Bijoy Koyitty)