Benchmark Tokyo rubber futures rose to a 3-week high on Monday, extending gains into a third session amid light trade, as the yen's drop last week and firmer Shanghai futures lent support to market sentiment. The Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery finished 1.4 yen higher at 158.5 yen ($1.53) per kg, after touching their highest since August 16.
"A softer yen in the morning prompted some fresh buys, but trades remained to be quiet throughout the day," said Satoru Yoshida, commodity analyst at Rakuten Securities. The most-active rubber contract on the Shanghai futures exchange for January delivery climbed 155 yuan to finish at 12,570 yuan ($1,882.69) per tonne. "The TOCOM rubber trading volume in August fell to the lowest since December 2004. It's almost a crisis," Yoshida said.
Trading volume of TOCOM rubber last month was at 135,816, the lowest since December 2004's 126,381. "With slack trade, the market may stay within a tight trading range," he added. The front-month rubber contract on Singapore's SICOM exchange for October delivery last traded at 130.3 US cents per kg, up 0.2 cent.
The US dollar quickly bounced back to 103.74 yen in early Monday trade, after having fallen to 102.80 yen following the underwhelming US payrolls data. But having gained more than 4 percent in six days, the dollar stalled on Monday, slipping 0.7 percent to 103.27 yen after BoJ Governor Haruhiko Kuroda's comments. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
