TOKYO, April 9 (Reuters) – Key Tokyo rubber futures jumped to their highest in almost five months on Thursday moving closer to the key 180 yen level, spurred by firm oil, a weak yen and strong stocks, which added to an already favorable technical chart.
* Traders, however, were cautious about assessing the potential impact on the market of a ruling party draft proposing that the Japanese government spend a bigger-than-expected $154 billion on economic stimulus. [ID:nT285727]
* The key Tokyo Commodity Exchange rubber contract for September delivery <0#JRU:> ended at 174.7 yen per kg, up 7.0 yen or 4.2 percent, after hitting an intraday peak of 176.6 yen, the highest since Nov. 17.
* TOCOM rubber staged a bounce from Wednesday when futures fell 4 percent to end below 170 yen snapping a six-day rally.
* “Reaction to the stimulus news has to be limited as current economic conditions remain severe, and there is also the risk that recovery could be stifled as massive bond issuances put upward pressure on long-term interest rates,” said Hitoshi Inagawa, senior manager at Yutaka Shoji Co.
* “The market is supported by favourable external factors and the chart outlook, but remains vulnerable as support primarily comes from producers shrinking supply rather than demand recovering,” he said.
* Oil rose about $2 to above $51 on Thursday, taking heart from strong stocks and base metals prices. [O/R]
* The dollar inched up against the yen to recover the 100 yen mark on Thursday. [USD/]
* Japan’s Nikkei average climbed 3.7 percent to a three-month closing high on Thursday led by a rise in electronic firm shares, which were cheered by the economic stimulus plan that raised hopes of revived consumer spending. [.T]
* U.S. stocks snapped a two-day slide on Wednesday on news the government is shoring up life insurers and optimism about consumer spending after Bed Bath & Beyond Inc reported a better than expected profit. [.N]
* General Motors Corp and Chrysler launched government-backed assistance programmes for parts supplies on Wednesday and the task force overseeing the carmakers’ restructuring was expected to meet with GM this week to speed up the process. [ID:nL8402203]
* Asian physical rubber prices were steady to slightly lower on Thursday, but support was firm as supplies remained tight while some demand was still detected out of China, the world’s largest consumer.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH WEDNESDAY
Grade Price Change
Thai RSS3 (May) $1.70/kg unchanged
Thai RSS3 (Jun) $1.70/kg unchanged
Thai STR20 (May) $1.65/kg unchanged
Thai STR20 (Jun) $1.65/kg unchanged
Malaysia SMR20 (May) $1.63/kg -$0.02
Malaysia SMR20 (Jun) $1.63/kg -$0.02
Indonesia SIR20 (May) $0.68/lb -$0.02
Indonesia SIR20 (Jun) $0.68/lb -$0.02
Thai USS3 53.0 baht/kg unchanged
Thai 60-percent latex (drums, May) $1,320/tonne unchanged
Thai 60-percent latex (bulk, May) $1,200/tonne unchanged

Source: Reuters

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