TOKYO: Benchmark Tokyo rubber futures ended up 2.4 percent to settle at a 7-1/2 month high on Thursday, with the yen’s slide to near a five-week low against the dollar spurring buying interest.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, surpassed the six-month high hit in January that was spurred by worries over lower production in flood-hit Malaysia and Thailand.
Japan’s Nikkei average also finished up 1.85 percent, buoyed by a weaker yen, which makes Japanese currency-denominated assets cheaper when purchased in other currencies.
“This is simply the (weak) dollar-yen,” said a Tokyo-based broker source. “There was buying interest from short-sellers as the yen weakened.”
The Tokyo Commodity Exchange rubber contract for July delivery finished 5.1 yen higher at 217.5 yen per kg. The benchmark contract hit an intraday high of 218.3 shortly before the close, the best since June 27, 2014. TOCOM was closed on Wednesday due to a national holiday.
The U.S. dollar was quoted around 120.20 yen, up from around 118.66 yen on Tuesday afternoon, supported by a rise in U.S. bond yields.
Rubber prices in Vietnam could decline by as much as 17 percent this year from 2014 to 31 million dong ($1,408) per tonne, the Vietnam News newspaper reported on Wednesday, quoting a senior executive of the Vietnam Rubber Group, the country’s top rubber producer.
The most-active rubber contract on the Shanghai futures exchange for May delivery ended unchanged at 13,620 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for March delivery last traded at 140 U.S. cents per kg, down 0.2 cent.
– Reuters
