TOKYO, Feb 25 (Reuters) – Key Tokyo rubber futures rose more than 2 percent on Wednesday, supported by a recovery in oil and share prices on assurances by Federal Reserve Chairman Ben Bernanke that the troubled banking sector would be protected.
* A fall in the yen to a three-month low against the dollar on Wednesday also supported rubber prices.
* The key Tokyo Commodity Exchange rubber contract for August delivery <0#JRU:>, which began trading on Tuesday, ended up 3 yen or 2.2 percent at 137.0 yen per kg. It rose as high as 140.7 yen, a one-week high for a benchmark rubber contract.
* Concerns about weak demand pulled down the previous benchmark contract to a two-month low of 130.4 yen last week.
* “Futures look supported by the currency and oil markets,” said a trader in Singapore.
* Oil prices inched above $40, after rising 4 percent on Tuesday, tracking a bounce on Wall Street, and higher-than-expected compliance by the Organisation of Petroleum Exporting Countries to its agreed production cuts encouraged the gains. [O/R]
* The dollar hit a three-month high against the yen, keeping gains from Tuesday when it rose on safe-haven bids for the U.S. currency after Bernanke warned that the U.S. recession may drag into 2010 unless government efforts succeed in restoring financial stability. [USD/]
* President Barack Obama struck a balance between grim economic reality and a more hopeful outlook on Tuesday in giving reassurances that the country will emerge from crisis “stronger than before.” [ID:nN18299008]
* Tokyo’s Nikkei share average <.N225> gained 1.6 percent, after nearing a 26-year low the previous day, as Wall Street also rallied back from 12-year lows on Tuesday on Bernanke’s assurances that he preferred to support banks without nationalising them. [.T]
* Rubber prices have struggled to rise much above 140 yen this year due to deteriorating prospects for global economy and growing concerns over the financial sector.
* Japanese trade data released on Wednesday showed the country’s exports nearly halved in January from a year earlier, with record slides in shipments to the United States, Europe and the rest of Asia pointing to a deepening recession across much of the world. [ID:nT49636]
* Rubber demand is likely to slow in March, with recent big buyer China pulling back from the market, but prices may still rise because of the normal seasonal drop in supply, traders said on Tuesday. [ID:nBKK46208]
* Asian physical rubber prices were a touch softer in quiet trade on Wednesday, but drew support from the rise in Tokyo futures.
PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH TUESDAY
Grade Price Change
Thai RSS3 (Mar) $1.40/kg -$0.05
Thai RSS3 (Apr) $1.40/kg -$0.05
Thai STR20 (Mar) $1.35/kg -$0.02
Thai STR20 (Apr) $1.35/kg -$0.02
Malaysia SMR20 (Mar) $1.35/kg -$0.02
Malaysia SMR20 (Apr) $1.35/kg -$0.02
Indonesia SIR20 (Mar) $0.58/lb -$0.01
Indonesia SIR20 (Apr) $0.58/lb -$0.01
Thai USS3 45 baht/kg -1 baht
Thai 60-percent latex (drums, Mar) $1,300/tonne unchanged
Thai 60-percent latex (bulk, Mar) $1,150/tonne unchanged
** NOTE – The prices quoted above are offer prices collected from traders in Thailand, Indonesia and Malaysia. They are not official prices quoted by state-run rubber agencies in those countries.

Source: Reuters

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