This entry was posted on Thursday, August 13th, 2009 at 4:07 pm and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
TOKYO, Aug 13 (Reuters) – Key Tokyo rubber futures rallied more than 4 percent to touch a 10-month high above 209 yen on Thursday, boosted by fund buying, while steady demand from tyre makers in the physical market was supportive.
* The key Tokyo Commodity Exchange rubber contract for January delivery <0#JRU:> settled up 8 yen or 4 percent at 209 yen per kg. The contract earlier rose as high 209.9 yen, the highest level for any benchmark since Oct. 9.
* Buying by tyre makers, including those in China, remains strong on any price fall, providing the market with solid support, traders said.
* The benchmark, which briefly broke above 200 yen last week, has consistently traded above the key psychological level since Tuesday, improving technical charts and prompting trend-following funds to buy.
* Improved economic data suggesting that the global economy may be on the mend has also encouraged buying on hopes of a recovery in demand for the industrial commodity.
* The Federal Reserve said on Wednesday the U.S. economy was showing signs of levelling out. But it kept its benchmark short-term interest rate near zero and said it would likely stay there for an extended period. [ID:nN1272730]
* The Fed’s decision fuelled buying as it makes investors feel less cautious on riskier assets, such as rubber, traders said.
* “It’s the power of money driving the rubber market higher,” said a manager at a Japanese trading firm. “There is no seller aggressive enough to stand against consistent buying by investment funds.”
Technical charts suggest a potential rally above 220 yen, the manager said.
* U.S. crude futures extended gains to trade firmly above $70 a barrel on Thursday as Asian stocks followed Wall Street higher, offsetting a larger-than-expected build in U.S. crude inventories. [O/R]
* The dollar slipped on Thursday after the Fed painted a less gloomy outlook for the U.S. economy but also said rates would remain low for a while, an assessment that led investors to return to commodity-linked currencies. [USD/]
Source: Reuters