Tokyo futures higher but lack momentum

TOKYO: Key Tokyo rubber futures settled 0.5 percent higher on Tuesday, helped by rises in oil prices and equities, but remained stuck in a tight range as investors lacked clues on the market's direction.

The key Tokyo Commodity Exchange rubber contract for February delivery settled up 1.9 yen at 364.9 yen per kg. The market has been locked in a 340-390 yen range since early May.

The most active Shanghai rubber contract for January delivery fell 415 yuan to close at 33,680 yuan per tonne. Volume stood at 645,890 lots.

"The European financial woes are unlikely to have a large impact on the rubber market because demand will likely remain steady, but investors can't find big market-moving factors," said Naoki Asami, chief broker at trading house Kanetsu.

Oil rose by as much as $1 as a weaker dollar rekindled some of the appeal of commodities and concern about Europe's deteriorating debt crisis eased temporarily.

Asian stocks steadied and the euro held above a seven-month low against the dollar, after a report that Italy may get financial support from China lifted Wall Street in late trade but did nothing to ease fears that Europe is descending into a banking crisis.

The Nikkei stock average rose 1 percent as short-covering emerged after a tumble the day before, but traders said gains may be short-lived as investors focus on Europe's debt woes and the US economic outlook.

India's natural rubber imports in August slumped 42 percent to 14,060 tonnes from a year ago as prices in the local market fell below international levels, erasing the incentive for tyre companies to buy overseas, the state-run Rubber Board said on Tuesday.

Toyota Motor Corp said it will invest 2.9 trillion rupiah ($337 million) in Indonesia, building a new factory and rolling out a new model, in its second move this year to expand in the fast-growing car market.

Nissan Motor Co has received approval from China to sell its electric vehicle Leaf there, and is prepared to export the model from Japan, Kimiyasu Nakamura, president of Nissan's China joint venture, told reporters on Tuesday.

Copyright Reuters, 2011