TOKYO, (Aug 10): Benchmark Tokyo rubber futures rose on Monday, rebounding from a nearly-7-month low hit earlier in the day, as a gain in Shanghai futures in the wake of stronger Chinese equities prompted fresh buying, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery <0#2JRU:> finished 3.3 yen, or 1.7 percent, higher at 196.7 yen per kg, after sliding to as low as 191.1 yen, the lowest since Jan 21.
“TOCOM got a boost later in the day following a sharp increase in China’s stock market and Shanghai futures in thin trade as some Japanese traders are away for summer holidays this week,” said Kaname Gokon, strategist atOkato Shoji Co.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 270 yuan, or 2.3 percent, to finish at 12,250 yuan per tonne.
China stocks jumped more than 4 percent on Monday on possible restructuring among major shipping firms and in other key sectors, and on hopes that less volatile trading may soon convince fund managers to get off the sidelines and re-invest billions in cash.
“TOCOM’s gain, however, may be short-lived as there are persistent worries about slowing demand in China,” Gokon said.
China is under growing pressure to further stimulate its economy after disappointing data over the weekend showed another heavy fall in factory-gate prices and a surprise slump in exports.
TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have lost more than 20 percent since hitting a 16-month high in early June, weighed down by lingering concerns over slowing demand in China.
Singapore’s SICOM exchange was closed on Monday for a holiday.