TOKYO : Tocom rubber futures were up in slow trade on Wednesday, tracking weaker stocks and extending the previous day’s five-week high on profit-taking.
While a weaker yen and upbeat economic data from China had pushed futures higher earlier in the week, weaker oil prices, concerns about falling demand and uncertainty about the U.S. economy and fiscal woes are now weighing on the market.
The most-active Tokyo Commodity Exchange rubber contract for May delivery was up by 3.0 yen at 265.0 yen per kg as of 15.37 JST. It had earlier fallen as low as 259.2 yen.
The benchmark contract hit a five-week high of 264.3 yen in Monday’s evening session, which counts as part of Tuesday’s trade, but later succumbed to profit-taking. Markets fear the United States could slip into recession if $600 bn in tax hikes and spending cuts are allowed to start taking effect in January. The White House and Congress have yet to agree on a long-term deficit reduction plan.
The dollar traded at around 81.85 yen retreating further from a near eight-month high of 82.82 yen hit in late November. Oil prices fell on Tuesday, as concerns about the U.S. budget crisis and global fuel demand outweighed ongoing worries about instability in the Middle East.
Source: Rubber Country
