TOKYO, Oct 5 (Reuters) – Benchmark Tokyo rubber futures surged to a 1-1/2-week high on Wednesday on the back of higher oil prices and the yen’s fall against the U.S.dollar.
The Tokyo Commodity Exchange (TOCOM) rubber contract for March delivery JRUc6 0#2JRU: finished 4.6 yen, or 2.8 percent, higher at 170.6 yen ($1.66) per kg, near a four-month high of 170.9 yen hit on Sept.23.
“Firmer oil prices and lower yen prompted a string of buying,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities. Oil prices rose in early trading after a report that U.S.fuel inventories may have fallen for a fifth straight week, but contracts remained near the $50 marker where many traders currently see fair value for crude.
O/R The U.S. dollar was slightly lower at 102.86 yen JPY= in late Asian trade after rising to a three-week high of 102.965 the previous day, when it posted its sixth straight session of gains versus its Japanese peer. FRX/ A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
“The TOCOM may gain further tomorrow, but investors will likely take profits before the three-day weekend in Japan,” he added. Chinese markets remained closed for National Day holidays.
Japanese markets will be closed on Monday for a public holiday. A flurry of data from China, the world’s top rubber buyer, in the coming weeks is expected to point to modest improvement in the economy in the third quarter as a government infrastructure spree and a housing boom boosts demand from steel and glass to furniture and appliances.
The front-month rubber contract on Singapore’s SICOM exchange for November delivery STFc1 last traded at 143.1 U.S. cents per kg, up 3.3 cents.
($1 = 102.8800 yen)
(Reporting by Yuka Obayashi; Editing by Subhranshu Sahu)