TOKYO, Nov 30 (Reuters) – Key TOCOM rubber futures ended 1.2 percent higher on Friday as yen’s fall against the dollar improved sentiment, but prospects of sluggish demand kept prices in check.
“The market barely moved, although buying from some foreign funds in anticipation of the Thai government’s intervention plan propped up the prices before the close,” said a trader.
The key Tokyo Commodity Exchange rubber contract for May delivery settled up 3.3 yen, or 1.2 percent, at 259.1 yen per kg.
The most active Shanghai rubber contract for May deliveryclimbed 1.2 percent to close at 23,945 yuan per tonne.
The front-month January contract on the SICOM in Singapore was last traded at 282.1 U.S. cents per kg, up 0.4 percent.
The Thai cabinet in September approved an additional budget of 30 billion baht to step up the purchases of rubber, but under that deal the Agriculture Ministry has to go back to get authorisation after each 5 billion baht is spent.
The Ministry of Agriculture wants to get permission from the cabinet next week to spend all the remaining 25 billion baht ($815 million), not just to buy rubber but to rent a private warehouse with a capacity to store another 240,000 tonnes, said Chanachai Plengsiriwat, the head of the Rubber Estate Organisation (REO).
In the domestic market, Japan’s factory output unexpectedly rose in October for the first time in four months, lifted by robust demand for smartphones in Asia and raising hopes that the worst of the contraction in the economy may be over.
Brent crude was stuck below $111 per barrel on Friday, as a lack of progress in critical U.S. budget talks to avert a looming fiscal disaster muddied the outlook for oil demand, while the Nikkei average hit a seven-month closing high on a weaker yen.
(Reporting by Yuko Inoue)
Source: Reuters
