TOKYO (Aug 7): Benchmark Tokyo rubber futures hit their highest in a week on Monday, helped by a weaker yen against the US dollar, stronger Shanghai futures and firm oil prices, dealers said.
The dollar, which briefly sank below 110.00 yen to a seven-week low last week, was steady at 110.695 yen.
A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
Oil prices edged down on Monday but still held near nine-week highs, supported by robust US jobs data last week and a slight fall in the US drill rig count, even as rising output from OPEC reined in crude markets.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery finished up 5.2 yen, or 2.5%, at 212.0 yen (US$1.9) per kg. Earlier in the session, it hit 213.1 yen, its highest since July 28.
The most-active rubber contract on the Shanghai futures exchange for January delivery surged 480 yuan to finish at 16,030 yuan (US$2,386) per tonne.
“Softer yen and solid oil prices prompted fresh buys in Tokyo, while some arbitrage deals between Shanghai and Tokyo also helped boost prices of forward-month contracts of the TOCOM,” said Hiroyuki Kikukawa, general manager of research, Nissan Securities.
Speculations that Thai government may take some actions to help bolster prices were also behind buys, he said.
“If a yen keeps falling, the TOCOM may try the July peak of 218.7 yen soon,” he added.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 150.5 US cents per kg, up 1.8 US cent.
(US$1 = 6.7175 Chinese yuan)
(US$1 = 110.7400 yen)
