TOKYO (Oct 17): Benchmark Tokyo rubber futures jumped to a one-month high on Friday, helped by Thai government measures to aid rubber farmers plus a rebound in oil prices and a lower yen, which led the contract to its biggest weekly gain in four months.
The Tokyo Commodity Exchange contract for March delivery rose 6.5 yen, or 3.6 percent, to end at 189.0 yen ($1.7746) per kg, the highest since Sept. 19. That was its biggest one-day gain since March 11.
The contract, which sets the tone for tyre rubber prices in Southeast Asia, has struggled for months because of slowing economies in China and other big consuming countries. But this week it rose around 6 percent, its best showing since mid-June.
"A rebound in oil prices is the biggest support to rubber prices," said Hiroyuki Kikukawa, general manager at Nihon Unicom Inc.
Brent rose more than $1 to trade above $87 a barrel on Friday, bouncing from near four-year lows as investors bought back into a market they saw as oversold in the short term.
"A recovery in the U.S. dollar is another plus," along with the measures for Thai producers, Kikukawa said.
"These positive factors prompted fresh buying as well as buying to liquidate sell positions," he added.
Thailand said late on Thursday it planned a series of measures to help rubber farmers, including nearly $1 billion to finance rubber purchases by a state-run body.
"It's still unclear if these measures will be implemented. If they are put in place, that will help boost rubber prices at least for the short term," said Toshitaka Tazawa, an analyst at Fujitomi Co.
The yen was off its recent highs on Friday after another choppy session overnight, when some calm returned to Wall Street thanks to encouraging U.S. data that helped take the edge off global growth jitters.
"The market may have bottomed out although weak sentiment among investors has not completely gone," a Tokyo-based trader said.
The most active rubber contract on the Shanghai futures exchange for January delivery climbed 295 yuan to finish at 12,705 yuan ($2,074) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 152.5 U.S. cents per kg, up 3.7 cent. (1 US dollar = 6.1238 Chinese yuan) (1 US dollar = 106.5000 Japanese yen)