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TOCOM hits 2-week high as Shanghai extends rally on Aug.7

Benchmark Tokyo rubber futures climbed to a 2½-week high on Tuesday as an extended rally in Shanghai futures and stronger oil prices offset lingering worries over Sino-US trade spat.

"The upward trend which started early this month seems to be continuing as the TOCOM market had extensively fallen," said Satoru Yoshida, a commodity analyst with Rakuten Securities, adding that rising oil prices were also behind the gains.

Oil prices rose with re-introduced US sanctions against major crude exporter Iran expected to tighten global supply.

The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery finished 0.9 yen higher at 171.4 yen (US$1.54) per kg, after hitting the highest since July 20 of 172.2 yen earlier in the session.

The most-active rubber contract on the Shanghai futures exchange for January delivery jumped 415 yuan to finish at 12,515 yuan (US$1,834) per tonne. It touched the highest since March 20 of 12,565 yuan earlier in the session.

"Still, future of rubber prices will be affected by how trade wars between the United States and China will develop," Yoshida said.

Chinese state media kept up their criticism of US President Donald Trump's trade policies, with a newspaper on Tuesday describing as "wishful thinking" Trump's belief that a fall in Chinese stocks was a sign of his winning the trade war.

The front-month rubber contract on Singapore's SICOM exchange for September delivery last traded at 133.6 US cents per kg, up 0.7 cent.

(US$1 = 6.8228 Chinese yuan)

(US$1 = 111.2700 yen)