TOKYO (Feb 7): Benchmark Tokyo rubber futures rose on Tuesday as investors looked for bargains after prices plunged 15% in the last five sessions while stronger Shanghai futures also boosted sentiment, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for July delivery finished 4.6 yen, 1.5%, higher at 303.5 yen (US$2.71) per kg, recovering from a 10-session closing low of 298.9 yen hit on Monday.
"Investors resumed buying after the contract fell below a key 300 yen mark," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
"The market may move higher and try recent highs as the dry wintering season is approaching in Southeast Asian producing countries," he said, adding that there was also a risk that the market might come under sharp selling pressure if the contract did not hold above 300 yen levels.
"Either way, the Shanghai market will lead the way," he said.
Rubber is tapped year round but latex output drops during the dry wintering season, when trees shed leaves. Wintering in Thailand and Malaysia lasts from February to April.
The most-active rubber contract on the Shanghai futures exchange for May delivery soared 520 yuan to finish at 20,680 yuan (US$3,005.46) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for March delivery last traded at 221.2 US cents per kg, up 2.6 US cents.
(US$1 = 112.1600 yen)
(US$1 = 6.8808 Chinese yuan)