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TOCOM Futures Trade at 3-Mth High with Japanese Biz Sentiment Up

Benchmark TOCOM rubber futures traded at a 3-month high early on Monday (Dec 16) after a survey showed sentiment at major Japanese manufacturers rose to its highest level in six years.

FUNDAMENTALS

The Tokyo Commodity Exchange rubber contract for May delivery was up 3.0 yen at 287.0 yen per kg by 0013 GMT, after earlier trading as high as 287.4 yen or its highest level since Sept. 9.

The contract finished 0.4 yen lower on Friday (Dec 13).

Japanese big manufacturers’ business confidence improved over the three months to December, a central bank survey showed on Monday (Dec 16), boding well for Prime Minister Shinzo Abe’s stimulus policies aimed at ending 15 years of grinding deflation.

Investors will also be looking to HSBC’s flash report on the manufacturing sector of China, the world’s top rubber buyer, due out at 0145 GMT.

Thailand’s military offered on Sunday (Dec 15) to help the politically polarised country hold a “fair and clean” election next year aimed at ending protests seeking to topple the government.

The U.S. Federal Reserve will hold its last policy meeting of 2013 on Tuesday (Dec 17) and Wednesday (Dec 18), with traders bracing for what could be a close call on the tapering decision.

MARKET NEWS

The U.S. dollar was quoted around 103.16 yen early on Monday (Dec 16), after briefly hitting a five-year high just shy of 104.00 yen on Friday (Dec 13).

Japan’s benchmark Nikkei stock average dipped 0.3 percent in Monday (Dec 16) trade, after U.S. stocks logged their worst week in nearly four months last week on concern that the Federal Reserve could signal the start of a reduction in its stimulus program at its policysetting meeting later this week.

The 19-commodity Thomson Reuters CRB index settled 0.2 percent lower on Friday (Dec 13), weighed down by the losses in natural gas and its biggest component, U.S. crude.

Reuters, December 16, 2013

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