Key Tokyo rubber futures edged down on Thursday (May 9), after surging to a two-month high earlier in the session, amid worries about high inventories in China and Japan.
The benchmark Tokyo Commodity Exchange rubber contract for October delivery was trading down 0.4 percent at 275.2 yen per kg as of 0215 GMT.
It earlier rose to 285.2 yen, the highest since March 13, buoyed by healthy gains in equity markets after strong Chinese trade data and signs that Germany may escape a sharp slowdown.
Prices had also got a boost after Bridgestone Corp, the world’s biggest tyre maker, maintained its record group operating profit forecast for 2013 despite low visibility of global demand outlook.
“The market has gained momentum from good earnings results from Bridgestone and strong Chinese trade data yesterday (May 8). But I doubt how long the current pace of rally will continue,” said Toshitaka Tazawa, an analyst at Fujitomi Co.
“The topside may be capped below the 290 yen level when taking into account the current high inventory levels.”
Crude rubber inventories at Japanese ports as of April 30 rose to their highest level since 2007.
Gains to around 290 yen would be a half-way recovery for rubber prices, which fell from a February high of 337.8 yen to a five-month trough of 242.6 yen last month.
In other markets, Asian shares firmed and oil prices rose.
Riskier assets remain underpinned by data showing China’s exports and imports grew more than expected in April, offering the possibility of a better outlook for the world’s second-largest economy.
Also helping boost sentiment was promising German industrial output that unexpectedly rose in March, beating even the highest forecast in a Reuters poll.
Source: Reuters
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