TOKYO: Key TOCOM rubber futures briefly touched a two-month high of 300.2 yen on Wednesday before settling up 2.8 percent on chances of market intervention by the Thai government to boost prices, but rising inventories may cap gains, a trader said.
The key Tokyo Commodity Exchange rubber contract for June delivery held steady above its 25-day moving average and settled at 298.5 yen, up 7.5 yen. It broke the psychological level of 300 yen for the first time since November.
"Sentiment is brighter, with support from the Thai government's plan to intervene in the market, but investors may find it hard to test a further rise, given weak consumption and higher levels of inventories in Japan and China," said Naoki Asami, chief broker at trading house Kanetsu.
Thailand's National Rubber Committee will seek cabinet approval next week for 15 billion baht ($472 million) to buy rubber to support prices, Deputy Prime Minister Kittirat Na Ranong said on Tuesday.
Japan's crude rubber inventories rose 1,141 tonnes in 10 days to a two-month high of 13,439 tonnes as of Dec. 31, according to the Rubber Trade Association of Japan.
Tyre grades changed hands at their highest prices in two months as buyers replenished stocks, supply tightened in parts of Asia and Tokyo futures rallied on expectations the Thai cabinet would approve a plan to buy rubber from farmers, dealers said on Wednesday.
Brent crude rose above $112 on Wednesday as the dollar weakened and a slew of positive economic indicators, from China to the United States, eased demand concerns triggered by the debt crisis in Europe.
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