TOKYO, March 12 (Reuters) – Benchmark Tokyo rubber futuresrose 2.3 percent on Wednesday to close at a near seven-weekhigh, tracking jumps in Shanghai rubber futures on the back of aweaker yuan, sources said.
The benchmark rubber contract on the Tokyo CommodityExchange (TOCOM) for August delivery started morningtrade down more than 2 percent, but settled up 5.3 yen at 240.3yen ($2.33) per kg, its highest close since Jan. 24.
The contract jumped as much as 3.3 percent to an intradayhigh of 242.8 yen, after Shanghai futures jumped by more than 5percent in early trade.
The most-active rubber contract on the Shanghai futuresexchange for September delivery rose 845 yuan, or 5.7percent, to finish at 15,765 yuan ($2,600) per tonne.
“The decline in yuan probably is having the most impact onprices,” said Kaname Gokon, general manager of research atbroker Okato Shoji.
“The direction seems random, however, and any rise or falldoes not tend to last till the next day amid a lack of tradingincentives.”
China’s yuan fell slightly on Wednesday as corporate dollardemand appeared to exceed supply, with the recent centralbank-engineered yuan devaluation translating into genuinelybearish market sentiment, traders said.
China’s central bank is prepared to take its strongestaction since 2012 to loosen monetary policy if economic growthslows further, by cutting the amount of cash that banks mustkeep as reserves, sources involved in internal policydiscussions say.
The front-month rubber contract on Singapore’s SICOMexchange for April delivery last traded at 193.50 U.S.cents per kg, up 1 cent.
($1 = 103.1850 Japanese Yen)($1 = 6.1402 Chinese Yuan) (Reporting by Osamu Tsukimori; Editing by Prateek Chatterjee)
Reuters
