This entry was posted on Wednesday, October 14th, 2009 at 7:53 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, Oct 14 (Reuters) – Key Tokyo rubber futures rose to a one-year high near 220 yen per kg on Wednesday before succumbing to profit-taking.
* Gains in oil and other commodity prices prompted speculative buying, and firmness in the physical rubber market, partly reflecting consistent buying interest by Chinese users, was also supportive.
* But the Tokyo market’s failure to clear the key 220 yen resistance level, coupled with a firming yen, prompted quick profit-taking.
* The key Tokyo Commodity Exchange rubber contract for March delivery <0#JRU:> rose as high as 219.6 yen, up 1 percent from the previous settlement of 217.4 yen. This marked the highest point for any benchmark since October 2008.
* But the contract reversed gains to fall 0.3 yen or 0.1 percent to 217.1 yen by 0545 GMT.
* “Breaking through the 220 yen level would change the market’s outlook to being completely bullish. That’s the key technical turning point,” said a manager at a trading firm in Japan, adding that if this happened, the upside potential would be a widening to 240 yen.
* But a rise in the yen versus the dollar has undermined investor sentiment for now, traders said. A higher yen deflates yen-denominated commodities futures prices.
* A complete halt at around 220 yen would form a double-top on the charts, which typically suggests a bearish technical outlook, the manager said.
* The dollar slid to its weakest level in 14 months against a basket of currencies on Wednesday, under pressure from expectations of continued low U.S. interest rates and as investors bet on commodity currencies. [USD/]
* The dollar fell 0.8 percent on the day to 88.95 yen, heading back towards last week’s eight-month low of 88.01 yen.
* Thailand, the world’s biggest rubber exporter, wants other top producers to help push up prices even as the country plans a big expansion in cultivation. Thailand also on Tuesday unveiled a plan to cultivate a further 160,000 hectares of rubber plantation by early next year. [ID:nBKK235114]
* Passenger car sales in China rose 83.6 percent in September from a year earlier. But government incentives which have boosted sales in recent months could easily be turned off in 2010 if Beijing frets about an overheating economy. [ID:nSHA305740]
* Oil hit a new 2009 high above $75 a barrel on Wednesday, boosted by the weak dollar and surprisingly strong China trade data that underscored a recovery in the world’s second-largest oil user. [O/R]
* Earnings from key U.S. companies are being carefully awaited to gauge the state of the world’s biggest oil consumer.
* U.S. stocks weakened on Tuesday as disappointing sales from Johnson & Johnson stirred jitters about the strength of earnings, snapping the S&P 500’s six-day winning streak.
Source: Reuters