TOCOM rises to 1-week high as Shanghai gains after holiday

TOKYO: Benchmark Tokyo rubber futures rose to a one-week high on Wednesday, lifted by bargain hunting as investors in Shanghai returned from a week-long holiday with positive sentiment.

The Tokyo Commodity Exchange rubber contract for March delivery finished up 1.7 yen at 181.1 yen ($1.6759) per kg, its highest closing since Sept 30.

"The market started soft on the higher yen in early trade, but it quickly recovered with bargain hunting after Shanghai market rebounded from an early dip," said Toshitaka Tazawa, analyst at Fujitomi Co.

The safe-haven yen stood tall on Wednesday, having risen broadly as risk appetite waned in the wake of a plunge in German industrial output and after the IMF cut its global economic growth forecasts for a third time this year.

Growth in the services sector in China, the world's biggest rubber consumer, weakened slightly in September as new business cooled, a private survey showed on Wednesday, reinforcing signs of a slowdown in the world's second-largest economy that could prompt more stimulus measures.

But the Tokyo rubber market paid little attention to the data, Tazawa said.

The most-active rubber contract on the Shanghai futures exchange for January delivery rose 180 yuan to finish at 12,580 yuan ($2,049.36) per tonne. It tumbled more than 3 percent in early trade before quickly recovering losses.

The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 145.0 U.S. cents per kg, up 3.1 cent.