TOKYO, May 20 (Reuters) – Benchmark Tokyo rubber futures rose for a second day on Monday, helped by demand optimism after news of a pick-up in auto sales in Europe, but gains were limited to around 290 yen by a reversal of the yen’s decline.
Europe’s ailing car market ended a streak of 18 straight months of falling sales last month, automotive industry association ACEA said on Friday.
But the news failed to reverse a bearish mood ahead of an expected seasonal rise in supply, keeping the Tokyo market from clearing a ceiling of around 290 yen, a half-way recovery from a February high of 337.8 yen to an April trough of 242.6 yen.
“Contrary to some players’ expectations, optimism on demand didn’t last long,” said Toshitaka Tazawa, an analyst at Fujitomi Co, referring to the news on European auto sales.
“Disappointing selling capped the topside because the market mostly hovered just below 290 yen,” he said.
Another bearish factor was Monday’s rebound in the yen from a 4-1/2-year low versus the dollar marked late last week.
A weaker yen in theory appreciates yen-denominated Tokyo prices and often invites speculative buying.
The benchmark Tokyo Commodity Exchange (TOCOM) rubber contract for October delivery settled at 289.5 yen per kg, up 1.7 yen from the previous close, after rising as high as 292.5 yen, its highest intraday level since May 14.
The October contract was recovering after falling as low 276.3 yen last Thursday amid concerns over the seasonal rise in supply. It was a one-week low and down 7.6 percent from a two-month high of 299 yen earlier in the week.
The most-active rubber contract on the Shanghai futures exchange was up 245 yuan, at 20,510 yuan per tonne.
The front-month June rubber contract on Singapore’s SICOM futures exchange was last traded at 252.2 U.S. cents per kg, down 1.9 cents.
Markets in Thailand, the world’s biggest rubber producer, were closed on Monday for a public holiday. (Reporting by Risa Maeda; Editing by Clarence Fernandez)
Source: Reuters