Tokyo futures rise further, euro zone worries weigh

BANGKOK: Tokyo rubber futures crept up in thin trade on Wednesday on the back of rebounding oil prices and the prospect of a supply cut by the world's biggest producer Thailand, but upside was still capped by concerns about Europe's debt crisis, dealers said.

The benchmark rubber contract on the Tokyo Commodity Exchange for March delivery rose 1.4 yen to settle at 304.4 yen ($3.7) per kg.

Trading volume was a mere 3,944 lots, compared to the usual daily trading volume of more than 10,000 lots.

"Rubber futures got some support from higher oil prices and could rise further on Thursday after prices finished above 300 yen. But, I think players are still worried about Europe's crisis," one dealer said.

Brent crude rose above $101 on Wednesday, snapping a three-day losing streak, after the Federal Reserve promised to launch more measures to help the fragile US economy and European finance ministers agreed to safeguard their banks.

Top rubber producer Thailand aims to cut output by 3.5 percent this year and will urge Indonesia and Malaysia to follow suit in a bid to prop up prices, which have fallen about a third since hitting a record high in February, industry officials said on Tuesday.

Copyright Reuters, 2011