TOKYO, Aug 9 (Reuters) – Benchmark Tokyo rubber futures rose to a 10 week high on Friday, buoyed by the yen’s retreat and China’s better-than-expected industrial production data which added to optimism that the world’s second-largest economy may be stabilising.
The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for January delivery rose 1.99 percent, or 5.1 yen, to settle at 261.3 yen ($2.72) per kg.
For the week, the benchmark contract, which touched a 10-week intraday high of 264 yen, gained 5.3 percent.
The contract jumped after China’s industrial output rose 9.7 percent in July, above expectations, while retail sales rose 13.2 percent.
This was in addition to Thursday’s upbeat trade data, which showed China’s exports rose 5.1 percent in July from a year earlier, a smart turnaround from their first fall in 17 months in June.
“Strong data from China made investors feel upbeat on the country’s economic outlook,” said Hiroyuki Kikukawa, general manager at Nihon Unicom Inc.
The yen was quoted at 96.75 yen against the dollar in afternoon Asian trade after hitting a seven-week peak of 96.165 per dollar on Thursday.
“A weaker yen, falling inventory in Japan, and rise in Shanghai rubber market were also behind the gain in Tokyo,” said Kikukawa.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 420 yuan, or 2.22 percent, to 19,330 yuan ($3,200) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery was untraded due to a national holiday.
Trade is expected to be thin next week in Japan due to the seasonal “obon” summer holidays, traders said.
Bridgestone Corp, the world’s biggest tyre maker, raised its operating profit forecast for this year by nearly 5 percent on Friday, citing benefit from the yen’s drop and lower raw materials costs.
“Our assumption is that rubber price will be on recovery in the second half of this year as global economy is expected to pick up,” Bridgestone’s Chief Financial Officer Akihiro Eto told a news conference.
($1 = 95.8950 Japanese yen)
($1 = 6.1225 Chinese yuan)
(Reporting by Yuka Obayashi; Additional reporting by Cheng Leng; Editing by Prateek Chatterjee)
Source: Reuters
