TOKYO (Sept 2): Benchmark Tokyo rubber futures ended a three-session losing streak on Tuesday, rising 1.9 percent, after the dollar rose to its highest against the yen since January.
The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for February delivery rose 3.8 yen to settle at 200.2 yen ($1.91) per kg.
That marks a sharp recovery after settling at the lowest close since June 10 on Monday as weak Chinese data hit investor sentiment.
The dollar hit a seven-month peak against the yen on Tuesday, helped by expectations for further gains for the currency on diverging monetary policy paths.
A weak yen makes Japanese currency-denominated assets cheaper when purchased in other currencies.
“This is nothing but the currency that’s driving the market higher,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo.
“The market had been negative till yesterday, and it bounced back with no other reason but the currency.”
Crude rubber inventories at Japanese ports stood at 16,903 tonnes as of Aug. 20, down 3.6 percent from 10 days earlier, data from the Rubber Trade Association of Japan showed on Monday.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 90 yuan to finish at 14,460 yuan ($2,352) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 163.30 U.S. cents per kg, up 1.9 cent.
(1 US dollar = 104.8300 Japanese yen)
(1 US dollar = 6.1469 Chinese yuan) Reporting by Osamu Tsukimori; Editing by Anand Basu)