Tokyo Futures Rise on Firmer Oil, Technicals Improve

Key Tokyo rubber futures rose on Wednesday (June 1) as firmer oil prices and improving technicals supported sentiment, but investors were cautious about chasing prices higher due to expected supply inflows as key producer Thailand begins tapping.

FUNDAMENTALS

The benchmark rubber contract on the Tokyo Commodity Exchange for November delivery rose 2.5 yen or 0.6 percent to 393.2 yen per kg as of 0014 GMT.

The most-active Shanghai rubber contract for September delivery rose 295 yuan to close at 32,850 yuan ($5,067.113) per tonne on Tuesday (May 31). Volume stood at 954,418 lots.

Oil prices were up in early Asia trade on Wednesday (June 1), after rising 2 percent the day before on the closure of a pipeline carrying Canadian crude to the United States and a decline in the dollar on new hopes for a debt bailout for Greece.

The euro hovered around three-week highs against the dollar on Wednesday (June 1) on expectations that Greece may avoid a debt restructuring while disappointing U.S. data raised concerns about growth and weighed on the U.S. currency.

MARKET NEWS

German rubber chemicals group Lanxess is in talks to buy Belgian chemicals group Taminco from private equity firm CVC for about 1 billion euros ($1.4 billion), The Financial Times Deutschland reported

A double-dip in home prices, pessimistic consumers and a slowdown in regional manufacturing raised concerns on Tuesday (May 31) that the U.S. economy's soft patch could become protracted.

U.S. gasoline fell to its lowest level in seven weeks and diesel fuel dropped below $4 a gallon for the first time in two months, the Energy Department said on Tuesday (May 31).

German carmaker Daimler is considering working with parts supplier Robert Bosch on batteries for electric vehicles, a Daimler executive told a German daily newspaper.

Tokyo's Nikkei stock average opened up 0.15 percent.

Wall St bulls took the upper hand with a 1 percent rally on Tuesday (May 31) as hopes for a new plan to deal with Greece's debt crisis relieved some investor worry, but grim economic data suggested more hurdles ahead as the S&P 500 closed out its worst month since August.

(Reuters, June 1, 2011)