TOKYO, Jan 22 (Reuters) – Key TOCOM rubber futures ended down 0.1 percent on Tuesday, wiping out all the gains made immediately after the Bank of Japan set a 2 percent inflation target, with investors on close watch on volatile moves of the Japanese currency.
“The yen’s rise against the dollar affected the market,” said Kaname Gokon, general manager at trading house Okato Shoji Co. “The market will most likely remain on a plateau, but the yen rate will hold the key for the future moves.”
The yen briefly fell against the dollar after the Bank of Japan doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets, but later regained ground as the new scheme for additional purchases only comes into effect next year.
The key Tokyo Commodity Exchange rubber contract for June delivery <0#2JRU:> settled down 0.3 yen at 311.3 yen per kg. The benchmark contract rose as high as 314.7 yen, up 1 percent, or 3.1 yen.
The most active Shanghai rubber contract for May delivery <0#SNR:> closed up 1.3 percent at 26,110 yuan per tonne.
The front-month February rubber contract <0#STF:> on the SICOM in Singapore was last traded at 303.1 U.S. cents per kg, up 0.5 percent.
The BOJ’s announcements surprised markets that had expected another incremental increase in its 101 trillion yen asset-buying and lending programme.
Positive growth signals both from the United States and China in the past weeks have also raised hope for improvement in demand, pushing up Brent crude price to near $112 a barrel on Tuesday. The Nikkei share average dropped 0.8 percent.
China is on track to recover from its longest growth slowdown since the global financial crisis, while economic data from the United States has improved.
A Thai government advisor said on Tuesday, Thailand, the world’s biggest rubber producer and exporter, has no plans to sell government rubber stocks, which have been bought from farmers in an intervention programme to shore up prices, on the overseas market.
(Reporting by Yuko Inoue; Editing by Jijo Jacob)
Source: Reuters
