RUBBER-Tokyo futures gain on weaker yen, optimism on Fed policy

Benchmark Tokyo rubber futures rose for a second session on Friday on the back of a weaker yen and higher share prices, as optimism spread that the Federal Reserve will not rapidly rein in its stimulus measures.

FUNDAMENTALS

* The benchmark Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery was trading up 1.0 percent at 232.4 yen per kg as of 0038 GMT, after touching a high of 233.9 yen.

* The Federal Reserve's asset purchases would be more aggressive than the timeline Chairman Ben Bernanke outlined last week if U.S. economic growth and the labour market turn out weaker than expected, the influential head of the New York Fed said on Thursday.

* Japanese manufacturing activity expanded in June at the fastest pace in more than two years, a survey showed on Friday, in a positive sign that domestic demand is picking up in the world's third-largest economy.

* China's central bank is squeezing funds out of the money market, forcing banks to borrow money at historic interest rate levels, but the manoeuvre appears to have been calculated to have limited impact on the real economy.

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MARKET NEWS

* The dollar hovered just below a four-week peak early in Asia on Friday, having lost only a bit of ground after two more Federal Reserve officials sought to play down fears over the central bank's plan to gradually reduce stimulus. Against the yen, the dollar held on to modest overnight gains at 98.50 JPY=.

* Japan's Nikkei share average extended its gains into a second day on Friday, helped by buying on Wall Street on optimism that the Federal Reserve will not rapidly rein in its stimulus measures.

* Crude oil futures rose for a fourth straight session on Thursday, gaining over $1 a barrel, as conviction strengthened that monetary stimulus measures from major central banks would stay in place for the time being.