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TOKYO, May 27 (Reuters) – Benchmark Tokyo rubber futures rose almost 1 percent on Wednesday, with buying spurred by strong crude oil prices and a recovery in the dollar versus the yen.
* But the Tokyo market has largely been stuck in a range between 160 and 165 yen per kg in the past few days, with the topside capped by a lack of investor confidence in demand for the industrial commodity.
* The key Tokyo Commodity Exchange rubber contract for November delivery <0#JRU:> settled at 163.7 yen per kg, up 1.4 yen or 0.9 percent.
* Steady buying by major tyre makers has been detected in the physical rubber market recently, a sign that their inventory adjustments are over. [ID:nSP495759]
* But it remains to be seen how sustainable their buying is and how quickly and strongly automakers increase their production after a slump in global demand last year forced the sector to slash output.
* “It’s all up to automakers,” said a manager at a Japanese trading firm, referring to whether or not there is further buying of natural rubber by tyre makers. “Automakers in Japan, for example, have said they slowed down their output reduction in March and started to increase output in April, but their demand is still limited.”
* U.S. crude oil rose to a six-month high above $63 a barrel as a jump in U.S. consumer confidence and signs of modest recovery in Japanese exports buoyed hopes that oil demand would rebound as the global economy recovers. [O/R]
* Japan’s exports to China in April declined at a slower pace than a year earlier. [ID:nT224936]
* The dollar rose 0.4 percent to 95.42 yen , following an improvement in U.S. consumer confidence. [USD/] A weaker yen inflates yen-based commodity futures prices.
* General Motors on Wednesday prepared to face the fallout from a failed debt exchange that sends the largest U.S. automaker closer to a bankruptcy filing expected by the end of the month. [ID:nN26513310]
* “Any big news on GM is being carefully awaited as it would have an impact on equities,” the manager said.
Source: Reuters