TOKYO: Key Tokyo rubber futures rose 3 percent to a six-week high on Wednesday as sentiment was helped by a rise in oil prices on signs of progress in talks to resolve US debt issues and strong US housing data.
The key Tokyo Commodity Exchange rubber contract for December delivery rose as high as 390.9 yen per kg, up 12.1 yen or 3.2 percent, the highest for any benchmark since June 9.
The contract settled at 388.9 yen, up 10.1 yen or 2.7 percent.
The most active Shanghai rubber contract for January delivery closed on Wednesday at 35,870 yuan ($5,549.711) per tonne, up marginally from Tuesday's 35,855 yuan per tonne. Volume slipped to 805,276 lots from 831,876 lots on Tuesday.
The euro rose against the dollar on Wednesday, with investors hopeful European leaders will reach some kind of deal to ease the debt problems in Greece at this week's summit but doubtful that this would ease fears of contagion.
German Chancellor Angela Merkel, Europe's reluctant paymaster, doused expectations of any comprehensive solution to Greece's debt crisis at an emergency euro zone summit on Thursday.
The rubber market was supported by a weaker yen during most of the day session. A softer yen inflates yen-priced TOCOM futures.
Oil rose by a dollar on Wednesday, bolstered by hopes of a US debt deal and by tightening crude stocks in the world's largest oil consumer.
A bipartisan group of senators offered an ambitious plan on Tuesday that could revive stalled US debt talks and the prospect of a long-term deficit reduction deal to avert a default by the United States.
The growth outlook also improved for the United States after data on Tuesday showed groundbreaking for US homes scaled a six-month high in June, partly reflecting growing demand for rental apartments.
Tokyo stocks marked their biggest daily rise in three weeks to close above 10,000 on Wednesday, boosted by a rally in tech shares after strong earnings from Apple, with more gains in sight as Japan heads into its earnings season.
Copyright Reuters, 2011
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