Tokyo rubber futures were steady to higher on Thursday, as investors held onto views that the Tokyo market was in a correction phase after touching a 10-month low earlier this week. The benchmark Tokyo Commodity Exchange rubber contract for December delivery ended the morning session unchanged at 247.7 yen ($2.02) a kg.
Other contracts were up 0.8 to 1.8 yen from the previous close. The key December contract on Monday fell as far as 242.9 yen, the lowest for any benchmark since January 10 and down more than 55 yen from a May peak. "It's possible the market could be bottoming out after heavy selloffs since last week," said Hiroyuki Kikukawa, associate director at Nihon Unicom Inc Kikukawa said the market could have entered a corrective phase, but the key contract still faces a tough technical barrier at around 256 yen a kg.
The market also remains weak amid views that more physical supplies are on the way from Thailand in the near future, he added, and due to speculation that demand from China may not be as strong as in the last two years. The dollar edged up against the yen from late London trade to around 122.75 yen, recovering from a trough near 122 yen hit earlier this week, as investors preferred currencies with prospects of higher interest rates.
A weaker yen inflates yen-based TOCOM futures prices. In Asian producing countries, the price of tyre-grade rubber was largely unchanged on Thursday. But some traders said prices could come down if weather conditions continue to improve, leading to an increase in supplies.
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