TOKYO (Oct 17): Rubber futures rebounded sharply to 1-month highs on Friday, supported by Thai government measures to aid rubber farmers, while a firmer U.S. dollar and a rise in battered oil prices helped improve sentiment, dealers said.
The Tokyo Commodity Exchange rubber contract for March delivery rose 6.8 yen, or 3.7 percent, to 189.3 yen ($1.78) per kg by 0335 GMT, after hitting 191.0 yen, the highest intraday level since Sept 19.
The rise put the contract on course for a weekly gain of about six percent, its biggest since May, 2013.
"A rebound of oil prices is the biggest support to rubber prices today," said Hiroyuki Kikukawa, general manager at Nihon Unicom Inc.
Oil won some respite from a four-month rout, with Brent climbing by almost a dollar to above $86 a barrel on positive U.S. economic data, although market analysts doubted the rally would take it much higher.
"A recovery in the U.S. dollar is another plus, along with a sign of measures to be made by producers," Kikukawa said, referring to a Thai government move to aid rubber farmers.
"These positive factors prompted fresh buying as well as buying to liquidate sell positions," he added.
Thailand said late Thursday it planned a series of measures to help rubber farmers, who have been hurt by a drop in global prices to five-year lows, but some farmer leaders said the policies would do little to support the market.
The yen was off its recent highs on Friday after another choppy session overnight where some calm returned to Wall Street thanks to encouraging U.S. data that helped take the edge off global growth jitters.
"I expect the rubber market to gradually recover toward December when rubber prices tend to go higher ahead of a low production season," Kikukawa said.
The most-active rubber contract on the Shanghai futures exchange for January delivery had climbed 320 yuan, or 2.6 percent, to 12,730 yuan ($2,078) per tonne by 0338 GMT.
* The number of Americans filing new claims for jobless benefits fell to a 14-year low last week and industrial output rose sharply in September, positive signals that helped ease fears over the economic outlook.
* India's southern state of Kerala, the country's biggest producer of natural rubber, will buy the commodity at a premium of 5 rupees ($0.0811) per kg from farmers hit by a drop in prices, a state-government official told Reuters.
* China said on Thursday it would punish carmakers by restricting their production and publicly naming them if they fail to meet fuel consumption requirements on passenger vehicles set for 2015.
(1 US dollar = 6.1250 Chinese yuan) (1 US dollar = 106.1400 Japanese yen)