SINGAPORE: Tokyo rubber futures bounced on Tuesday after oil and equities rose ahead of emergency talks by the Group of Seven leading industrialised powers to contain the euro zone crisis, but prices were still within sight of their weakest since late 2009.
The most active rubber contract on the Tokyo Commodity Exchange, currently for November delivery, added 1 yen a kg to settle at 243.8 yen after trading as high as 248.5 yen. Volume was 7,096 lots.
On Monday, the contract plunged more than 5 percent to 240.3 yen a kg, its weakest since November 2009, after speculators dumped riskier assets such as equities and commodities on concerns the debt crisis in Europe could spark a global economic meltdown.
"The problems in Greece and Spain are not being solved. I don't see that the rebound is going to be sustainable," said Ker Chung Yang, an investment analyst at Phillip Futures in Singapore.
"But I think the kind of drastic movement has been over, so in the next couple of trading days, we are going to see rubber prices consolidate at the current level," said Ker, who pegged key support at around 240 yen.
Finance chiefs of the G7 will hold emergency talks on the euro zone debt crisis on Tuesday in a sign of heightened global alarm about the threat posed by strains inside the 17-nation monetary union.
Asian shares, the euro and commodities all rebounded on Tuesday, with stocks holding a touch above 2012 lows, as investors looked to European policymakers and the wider G7 to take decisive action to address the worsening euro zone crisis.
With Greece, Ireland and Portugal all under international bailout programmes, financial markets are anxious about the risks from a Spanish banking crisis, and fret a Greek election on June 17 could lead Athens to leave the single currency and precipitate yet more economic turbulence.
In Shanghai, the most active rubber contract, September , ended at 22,445 yuan a tonne, up slightly from 22,305 yuan on Monday, when the contract sank to its lowest since July 2010, dragged down by Tokyo.
The front-month July rubber contract on the SICOM in Singapore was last traded at 290 US cents per kg, up 3.10 cents.
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