TOKYO, Aug 13 (Reuters) – Benchmark Tokyo rubber edged down on Tuesday as market players hesitated to take new positions as they looked for signs that recent gains could be sustained.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, had been on a rise with the contract hitting a 2-1/2 month high on Monday on the back of improving sentiment for China.
But with major consumers, like top rubber buyer China, not seen picking up physical cargoes, traders took a breather to see if the recent market gains have staying power.
“Many in the market are taking a ‘wait-and-see approach’ to see if fundamentals will catch up to the recent gains,” said one Singapore-based trader, adding that many traders were either on summer holidays or just back.
The key TOCOM rubber contract for January delivery edged down 0.2 yen to settle at 265.0 yen per kg.
The marginal dip came despite a sharp rise in Japanese equities and the yen after a local media report that Prime Minister Shinzo Abe is considering a cut in corporate tax to counter the pain of a planned sales tax increase.
But tapering that positive sentiment out of Japan was data showing core machinery orders fell in June and companies expect them to fall further in the current quarter, another sign that government stimulus has yet to boost capital spending.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 1.7 percent to finish at 19,855 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 242.5 U.S. cents per kg, or 1.5 cents higher. (Reporting by James Topham; Editing by Sunil Nair)
Source: Reuters
