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Tokyo Rubber Futures Rebound on Bargain-Hunting Amid Thin Trade (April 14)

Benchmark Tokyo rubber futures rebounded on Monday (Apr 14) as investors looked for bargains after seeing a fourth straight week of losses last week, but trade was thin as all eyes were on China’s GDP, due Wednesday (Apr 16), for clues on the outlook for the top buyer.

The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for September delivery rose 0.3 yen to settle at 214.0 yen ($2.11) per kg.

The contract finished last week down 4.2 percent, with the declines over the past four weeks totalling 11 percent.

“The market ended slightly higher, but there was no real direction today (Apr 14) as everyone is waiting for China’s GDP data,” said Jiong Gu, an analyst at Yutaka Shoji Co, pointing out that trading volume was about a half of a daily average.

China’s GDP, to be released on April 16, is forecast to have grown 7.3 percent in the January-March quarter from a year earlier, according to the median forecast of 25 economists polled by Reuters, after growing 7.7 percent in the final quarter of 2013.

“If Chinese economic indicator comes worse than expected, rubber price may test 210 yen. But the weak number may also prompt the government to come up with new stimulus, which may give a support to the market,” Gu said.

The rubber prices defied the weak Japanese stock market which slumped to a fresh six- month low on Monday (Apr 14), weighed by fragile market sentiment after a rocky session on Wall Street and on escalating tensions in Ukraine.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 200 yuan to finish at 14,945 yuan ($2,400) per tonne. The contract dipped as low as 14,720 yuan, a three-week low, but shook off some of the earlier losses before the close.

The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 177.00 U.S. cents per kg, down 2.30 cents.

– Reuters

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