TOKYO, Sept 17 (Reuters) – Benchmark Tokyo rubber futures rose 0.5 percent on Tuesday, gaining for the first time in three days and erasing an initial fall to a two-week low in the morning.
The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for February delivery rose 1.4 yen to settle at 273.4 yen ($2.77) per kg. Hurt by a stronger yen, the it earlier fell to as much as 268.4 yen, the lowest since hitting 268.0 yen on Sept. 2.
Tokyo markets were closed on Monday for a national holiday.
“The markets have bounced back a little in a correction to recent declines,” said a Tokyo-based industry source. “However, the fundamentals still seemed weak as producers were willing to sell reflecting abundant spot inventories.”
The market initially started weaker in early trade, reflecting a stronger yen. The U.S. dollar was quoted around 99.16 yen in Asia by 0736 GMT, down from 99.72 yen late Friday.
A stronger yen makes dollar-based rubber cheaper and normally encourages players to sell rubber contracts to cut losses.
Protesters blocked a highway in southern Thailand for a second day on Tuesday in a bid to force the government to increase a subsidy for rubber farmers, even though a curfew was imposed in the area after clashes with riot police on Monday.
Most farmers’ groups have agreed in principle to the government’s offer of a 21.2 billion baht ($665 million) subsidy, which works out to around 10 baht per kg.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.5 percent from the previous week, the exchange said on Friday.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 190 yuan to finish at 20,390 yuan ($3,300) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 237.70 U.S. cents per kg, down 1.2 cents.
($1 = 98.7900 Japanese yen)
($1 = 6.1203 Chinese yuan)
(Reporting by Osamu Tsukimori; Editing by Sunil Nair)
Source: Reuters
