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TOKYO, July 24 (Reuters) – Key Tokyo rubber futures rose above 180 yen per kg for the first time since November on Friday in an eight-day rally as recent gains in oil prices fuelled optimism over demand for the industrial commodity.
* Rubber futures were also aided by steady buying by investment funds, which has helped maintain momentum in the market in the past several days, traders said.
* The key Tokyo Commodity Exchange rubber contract for December delivery <0#JRU:> settled at 179.9 yen, up 4.7 yen or 2.7 percent from the previous day.
* The TOCOM market last marked an eight-day rising streak in August last year.
* The December contract earlier rose as high as 182.0 yen, the highest for any benchmark since Nov. 12, before profit-taking set in.
* It rose 5.6 percent on the week, adding to the previous week’s 8.5 percent gain.
* Concerns about the financial health of U.S. automakers dragged the Tokyo market below the 180 yen level in November.
* The Tokyo market had failed to break above that level given a slump in global auto production, resulting in weak tyre demand.
* But improved technical charts suggest the market may test 200 yen, the next psychological barrier, in the near future, some traders said.
* “Buying from funds had pulled up the market. They were real bulls as they increased buying in the rally,” said a manager at a Japanese commodity brokerage.
“But dealers started to sell at or above 180 yen, putting a lid on gains,” he said. Profit-taking after a speedy run-up was set to limit gains at 182-183 yen for now and then 185-186 yen, he said.
* China has recently bucked the trend in the struggling global car industry, resulting in a gradual return of Chinese buyers in the physical rubber market.
* Oil prices inched lower on Friday, after rising to a three-week high above $67 a barrel the day before propelled by a rally on Wall Street driven by strong corporate earnings and positive U.S. housing data. [O/R]
* U.S. existing home sales notched their third straight monthly rise in June and prices hit the highest level since October, fueling hopes that the housing sector is finally on the mend and will help support a broader economic recovery. [ID:nN23398724]
* Japan’s Nikkei share average <.N225> followed U.S. stocks higher and closed up 1.6 percent.
Source: Reuters