TOKYO (Aug 6): Benchmark Tokyo rubber futures rose to a two-week high on Monday, backed by a rally in Shanghai futures, but concerns over Sino-US trade friction capped gains, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery finished up 2.2 yen, or 1.3%, at 170.5 yen (US$1.53) per kg. Earlier in the session, it hit the highest since July 23 of 171.2 yen.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 235 yuan to finish at 12,150 yuan (US$1,775) per tonne.
“Higher Shanghai market and a break in the yen’s rally against the US dollar helped rubber prices,” said Hiroyuki Kikukawa, general manager of research, Nissan Securities.
The yen slightly weakened against the dollar to 111.34 yen on Monday, after rising 0.4% on Friday amid worries about Sino-US trade tensions as China proposed retaliatory tariffs on US$60 billion worth of US goods such as liquefied natural gas and aircraft.
A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
“But whether or not the TOCOM will bottom out here will depend on the future of trade wars between the United States and China,” Kikukawa said.
Chinese state media on Monday lambasted US President Donald Trump’s trade policies in an unusually personal attack, and sought to reassure investors anxious about China’s economy as growth concerns battered its financial markets.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 132.0 US cents per kg, up 0.6 cent.
(US$1 = 111.2400 yen)
(US$1 = 6.8435 Chinese yuan)
