Tokyo futures edge higher after Thai support plan

BANGKOK: Tokyo rubber futures ended higher on Tuesday as players bought back contracts and pushed the price back above major support at 300 yen, encouraged by the announcement of plans by Thailand to cut supply to prop up the market, dealers said.

The benchmark rubber contract on the Tokyo Commodity Exchange for March delivery inched 0.4 yen higher to settle at 303.0 yen ($3.95) per kg.

"Players stated buying back contracts when the price reached an intra-day low of 295.2 yen. They might think that prices have reached the bottom and could rebound," one dealer said.

The most active rubber contract on the Shanghai rubber futures exchange for January delivery rose 1,104 yuan to settle at 27,775 yuan ($4,349) per tonne.

Another dealer said TOCOM prices got additional support from the latest measure from Thailand, the world's biggest rubber producer and exporter, to cut its annual output by 120,000 tonnes to prop up prices.

This year Thailand had expected to produced 3.2 million tonnes.

Dealers said TOCOM prices may rise further on Wednesday as sentiment improved after prices finished above the key psychological level of 300 yen per kg.

Copyright Reuters, 2011