TOKYO, July 11 (Reuters) – Benchmark Tokyo rubber futures bounced back on Monday, snapping a four-day losing streak and recovering from a near five-month low hit last week, as a softer yen, higher Tokyo stock market and recovery in Shanghai futures prompted short-covering. The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery JRUc6 0#2JRU: finished 3.1 yen, or 2.1 percent, higher at 150.3 yen ($1.47) per kg. The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, touched 145.9 yen last Friday, the lowest since Feb.12 amid worries over excess supply and weak demand in top consumer China.
“But the weaker yen and stronger Nikkei index led investors to unwind their short positions while a rebound in Shanghai futures also lent support,” said Toshitaka Tazawa, analyst at Fujitomi Co. The yen fell by over 1 percent against the dollar on Monday as Japan’s stocks jumped 4 percent, after the country’s ruling coalition won a landslide victory in upper house elections, boosting hopes for more monetary stimulus.
FRX/ .T A weaker yen makes yen-denominated assets more affordable when purchased in other currencies. The most-active rubber contract on the Shanghai futures exchange for September delivery SNRcv1 rose 55 yuan to finish at 10,880 yuan ($1,626.72) per tonne. “If China’s trade data, due later this week, is strong, the TOCOM rubber may head towards 160 yen,” Tazawa said.
The front-month rubber contract on Singapore’s SICOM exchange for August delivery STFc1 last traded at 126.0 U.S. cents per kg, down 0.5 cent.
($1 = 6.6883 Chinese yuan renminbi) ($1 = 102.1400 yen)
(Reporting by Yuka Obayashi; Editing by Sherry Jacob-Phillips)