TOKYO, Dec 17 (Reuters) – Key TOCOM rubber futures rose to a seven-month high on Monday as the yen slumped against the dollar after a conservative party that has pledged to aggressively easing monetary policy won a landslide victory in Japanese elections on Sunday.
FUNDAMENTALS
* The most-active Tokyo Commodity Exchange rubber contract for May delivery <0#2JRU:> was changing hands up 5.6 yen, or 2 percent, at 282.0 yen per kg.
* The May contract earlier rose to 282.8 yen, the highest for any benchmark since May 14.
* Rubber has been supported by a weaker yen, which makes yen-denominated assets more affordable when purchased in other currencies.
* The victory by Japan’s Liberal Democratic Party (LDP), which had ruled the country for most of the past 50 years before it was ousted in 2009, will usher in a government pledged to a tough stance in a territorial row with China, a pro-nuclear energy policy despite the 2011 Fukushima disaster and a potentially risky recipe for hyper-easy monetary policy and big fiscal spending to boost growth.
* China will maintain steady economic polices in 2013, leaving room for manoeuvre in the face of global risks while deepening reforms to support long-term growth, the official Xinhua news agency said after an annual policy-setting conference on Sunday.
MARKET NEWS
* The yen slumped to its lowest in over a year-and-a-half against the U.S. dollar on Monday as part of a broad skid after the LDP’s victory.
* Japan’s Nikkei average climbed 1.3 percent to an eight-month high in early trade on Monday, boosted by the weaker yen.
* U.S. crude oil futures extended gains on Monday to around $87 a barrel amid hopes for higher demand from China, the world’s No. 2 oil consumer.
DATA EVENTS
* The following data is expected on Monday: (Time in GMT)
0900 – Italy trade balance for October
1000 – Euro zone trade data for October
1000 – Euro zone labour costs for third quarter
1330 – New York Fed empire state survey for December
(Reporting by Risa Maeda; Editing by Joseph Radford)
Source Reuters
