TOKYO, Feb 6 (Reuters) – Key TOCOM rubber futures hit a 10-month high on Wednesday as firming share prices and yet another drop in the yen spurred buying, although trading is expected to be muted ahead of a week-long holiday in key consumer China.
FUNDAMENTALS
* The most-active Tokyo Commodity Exchange rubber contract for July delivery <0#2JRU:> was trading at 336.3 yen per kg as of 0017 GMT, up 4.8 yen or 1.5 percent from Tuesday’s close.
* The contract had risen as high as 337.5 yen in early trade, exceeding Monday’s high of 337.4 yen and hitting the highest for any benchmark since late March 2012.
* The yen resumed its decline on Wednesday on market speculation that a more dovish Bank of Japan governor will replace Masaaki Shirakawa, who late on Tuesday announced he will step down on March 19, three weeks before his five-year tenor ends in April.
* A weaker yen makes dollar-based commodities more expensive in Japan and can encourage players to take speculative buying positions in TOCOM rubber.
* Toyota Motor Corp, the world’s best-selling automaker, lifted its annual profit guidance on Tuesday, banking on stronger sales in its key U.S. market and a boost from a weaker yen.
* China shrugged off rising rubber prices in the past week and bought several cargoes of Thai and Indonesian rubber as tyre makers stocked up before the Lunar New Year holiday, dealers said on Tuesday.
* Markets in China will be closed for a week starting on Feb. 9 for the Spring Festival holiday.
MARKET NEWS
* Asian shares recovered on Wednesday as solid euro zone data calmed nerves jarred by potential political turmoil derailing the region’s efforts to resolve its debt crisis, while the prospect of a dovish new governor for the Bank of Japan weakened the yen.
* The dollar and euro both surged to fresh 2-1/2 year highs at 93.79 yen and 127.43 respectively, steadily moving towards their 2010 peaks around 94.99 and 134.37.
* U.S. crude steadied above $96 per barrel after positive data from the United States and Europe strengthened the view that the global economy is on the mend.
DATA EVENTS
* The following data is expected on Wednesday: (GMT)
1100 Germany Industrial orders
1200 U.S. Weekly mortgage market index
1530 U.S. EIA petroleum status report (Reporting by Risa Maeda; Editing by Himani Sarkar)
Source: Reuters
