TOKYO, Oct 15 (Reuters) – Tokyo rubber futures eased as investors took profits on Thursday when they neared a major resistance level at 220 yen, but sentiment remained bullish due to strong oil prices.
* The key Tokyo Commodity Exchange rubber contract for March delivery <0#JRU:> fell 3.5 yen or around 2 percent to 214.4 yen per kg, after earlier rising to 219.1 yen.
* The benchmark contract retreated on profit taking from a one-year high of 219.6 yen on Wednesday, proving that 220 yen remained the key technical resistance level. The last time a benchmark rose above 220 yen was in October last year.
* Rubber futures were supported, however, by the general inflow of speculative money into commodities and commodity-linked currencies as investor risk appetite was slowly recovering.
* “Rubber, along with other commodities and commodity-linked currencies such as the Australian dollar, is rising as it is becoming clear that risk-taking is resuming and speculative money is flowing into the markets across the board,” said Masato Miyanaga, senior adviser at H.S. Futures in Tokyo.
* “While players may face near-term resistance at 220 yen, the market is looking upwards technically after breaking above a 191-210 yen range that had been in place since August,” he said.
* A new range was forming at 210-230 yen, he said.
* Traders said firmness in the physical market due to tightness in supply and strong oil prices also helped support sentiment for futures.
* U.S. crude oil rose towards $76 per barrel on Thursday, extending the previous day’s gains when it settled at a record high for the year on renewed optimism about the outlook for the economy. [O/R]
* The dollar was around 89.65 yen on Thursday compared with late U.S. trading levels of 89.36/40. [USD/]

Source: Reuters

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