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TOCOM rubber climbs on technical rebound, weaker yen

TOKYO (April 25): Benchmark Tokyo rubber futures climbed in light trade on Wednesday, helped by technical buying and a weaker yen against the dollar, dealers said.

The Tokyo Commodity Exchange (TOCOM) rubber contract for September delivery finished 0.6 yen higher at 188.2 yen (US$1.7) per kg.

TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, touched a 17-month low about a month ago amid lingering worries about oversupply in Asia.

“Fundamentals have not changed, with abundant inventories in Shanghai and Tokyo,” said a Tokyo-based dealer who declined to be named.

Crude rubber inventories at Japanese ports stood at 16,357 tonnes as of April 10, up 4.9% from the last inventory date, data from the Rubber Trade Association of Japan showed on Tuesday.

“But we have seen technical rebound recently as investors got tired of selling,” he said, adding that a weaker yen also supported prices.

Against the yen, the dollar neared a two-month high of 109.20 yen hit in the previous session. It was a notch below that at 109.18 yen in late Asia trade, up 0.3% on the day. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.

The most-active rubber contract on the Shanghai futures exchange for September delivery rose 55 yuan to finish at 11,605 yuan (US$1,836) per tonne.

“The TOCOM benchmark may rise to around 193-195 yen per kg in the short term if Shanghai futures maintain a recovery trend,” the dealer said.

The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 139.3 US cents per kg, down 0.5 cent.

(US$1 = 6.3210 Chinese yuan)
(US$1 = 109.1300 yen)

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