TOKYO, June 24 (Reuters) – Benchmark Tokyo rubber futures edged up in thin early trade on Monday as a weaker yen and firmer local share market spurred buying, but gains were capped by concerns over slowing demand and a cash crunch in China.
FUNDAMENTALS
* The benchmark Tokyo Commodity Exchange (TOCOM) rubber contract for November delivery was trading up 0.59 percent at 237.7 yen per kg as of 0046 GMT.
* The contract touched 238.8 yen in early trade. It gained 0.4 percent last week.
* Crude rubber inventories at Japanese ports as of June 10 fell to 13,209 tonnes, down 1,035 tonnes over a 10-day period to the lowest level since March 10, data from the Rubber Trade Association of Japan showed.
* Japanese Prime Minister Shinzo Abe’s ruling bloc swept to victory in a weekend Tokyo election, a sign it’s on track for a hefty win in a July national vote that could strengthen Abe’s hand as he aims to end economic stagnation.
* China’s central bank faced down the country’s cash-hungry banks on Friday, letting interest rates again spike to extraordinary levels of some 25 percent for some banks as it stepped up the pressure to contain rampant informal lending.
* St. Louis Federal Reserve Bank President James Bullard on Friday issued a sharp rebuke of his colleagues’ decision to announce a plan to reduce the central bank’s bond buying, calling the move premature and worrying the Fed is risking its credibility as a force for price stability.
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MARKET NEWS
* Japan’s Nikkei share average rose 1.4 percent on Monday, extending its previous session’s gains, on the back of a weaker yen and after Japan’s ruling party won a sweeping election victory in the Tokyo Metropolitan Assembly elections on Sunday.
* The dollar scaled a fresh two-week peak against a basket of major currencies in Asia on Monday, as momentum builds after the Federal Reserve laid out a roadmap for scaling back stimulus.
* Oil slid for a second day in choppy trade on Friday, with Brent posting its biggest two-day drop since September as the U.S. dollar rallied and traders feared slower oil demand in China and diminished investor demand in the United States.
DATA EVENTS
* The following data is expected on Monday: (Time in GMT)
0800 Germany Ifo business climate
0800 Germany Ifo expectations
0800 Italy Consumer confidence
1230 U.S.
Chicago National Activity Index
1430 U.S.
Dallas Fed Manufacturing Index (Reporting by Yuka Obayashi; Editing by Richard Pullin)
Source: Reuters
