TOKYO: Benchmark Tokyo rubber futures rose for the third straight day on Thursday as the Shanghai futures contract extended gains on hopes cuts in mortgage rates and downpayment levels would aid in the recovery of China’s real estate market, dealers said.
The Tokyo Commodity Exchange rubber contract for March delivery closed 1.2 yen higher at 182.3 yen ($1.6939) per kg. It had earlier climbed to as high as 183.1 yen, the highest intra-day level since Oct 1.
“There was no fresh news today, but the Tokyo prices kept a positive tone following a rise in Shanghai, which was aided by China’s recent announcement of measures to support a sagging housing market,” said Jiong Gu, analyst at Yutaka Shoji Co.
Before the week-long break that ended Tuesday, the People’s Bank of China cut mortgage rates and downpayment levels for some home buyers, its first since the 2008 global financial crisis.
The rise in TOCOM rubber prices came despite a higher yen and a dip in the Japanese equities market.
The dollar fell to a three-week low against the yen on Thursday, as investors cut favourable bets after minutes of the Federal Reserve’s last meeting prompted many to push out expectations for the likely timing of an interest rate rise.
Japan’s Nikkei share average fell to a 5-week low on concerns about a resurgent yen.
“Despite the recent gains, hedge funds are accumulating selling positions and I expect potential selling pressure from speculators. The benchmark is likely to be stuck at 180-185 yen for a while,” Gu said.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 110 yuan to close at 12,580 yuan ($2,052.20) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for November delivery last traded at 144.20 U.S. cents per kg, up 1.1 cent.