By Lewa Pardomuan
SINGAPORE, Oct 7 (Reuters) – Bargain hunting and talk that China is building up rubber stockpiles again could push Tokyo futures up to resistance levels this week.
The most active March rubber contract on the Tokyo Commodity Exchange rose about 1.3 percent to a high of 257.50 yen a kg after losing nearly 6 percent in thin trade last week as markets in China were closed for a holiday. Trading resumes there on Tuesday.
Key support was pegged at 254 yen a kg and resistance at 270 yen. The Tokyo market, which sets the tone for tyre-grade prices, often tracks movements in equities and currencies.
“Tokyo rubber has gone down too much. I think it may go back to 265 yen today or tomorrow,” said Gu Jiong, an analyst at Yutaka Shoji Co in Tokyo.
“I’ve heard the (Chinese) government may buy a total of 200,000 tonnes of rubber; 150,000 will be from the local market and 50,000 tonnes from the foreign market. It may support the price.”
Last year, China announced it would buy up to 200,000 tonnes of rubber from the domestic market to support prices but dealers said only a fraction was purchased by the end of 2012.
Source: Reuters
