Rubber Tokyo futures track Nikkei higher, Off 9-month trough

Reuters: Tokyo rubber futures ended higher on Monday as the Nikkei rose and a weaker yen spurred buying from speculators, but concerns over demand from top consumer China kept prices in check.

Dealers also waited for hints on when the U.S. Federal Reserve will ease its stimulus after three quantitative easing programmes by the central bank boosted commodity prices for nearly three years.

The most active November contract on TOCOM settled 3.6 yen a kg higher at 238.9 yen after marking a fifth straight week of losses. The contract plunged to a 9-month low at 230.5 yen last week because of a rising yen.

“I have concerns about the economic situation in China, but there seems to be a short rebound to above 240 yen. From a technical point of view, we may get to 245 yen and above that,” said a dealer in Tokyo.

“I think support is around 230 yen. So maybe the range will be between 230 and 250 yen this week.”

Risks are rising that China’s economic growth will fall further in the second quarter and that full-year forecasts will be cut further, after recent data showed weakness in May exports and domestic activity struggling to pick up.

The most active rubber contract on the Shanghai futures exchange for September delivery was last traded at 18,110 yuan a ton, higher than 17,910 yuan at the previous close and off last week’s contract low at 17,560 yuan.

The front-month July contract on Singapore’s SICOM Exchange was last traded at 233.40 U.S. cents per kg, up 5 cents.