TOCOM climbs for 3rd day amid U.S.-China trade optimism on Jan.8

The benchmark Tokyo rubber futures rose for a third straight session on Tuesday, boosted by optimism U.S.-China talks may end a trade war between the two largest economies.

“High expectations for the latest round of U.S.-China trade talks lent support to the market,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

U.S. Commerce Secretary Wilbur Ross predicted on Monday that Beijing and Washington could reach a trade deal that “we can live with”, as dozens of officials from the world’s two largest economies resumed talks in a bid to end their trade dispute.

The Tokyo Commodity Exchange (TOCOM) rubber contract for June delivery  finished 4.3 yen, or 2.4 percent, higher at 181.6 yen ($1.67) per kg.

The TOCOM benchmark, which sets the tone for rubber prices in Southeast Asia, touched an about 7-month high of 186.4 yen the previous session.

A recovery in Tokyo equities market and firmer oil prices also helped the gains, Kikukawa said.

Japan’s Nikkei settled higher on Tuesday on signs the United States and China were inching closer to a detente in trade tensions, while a weaker yen lifted exporters.

Oil prices were stable on Tuesday, supported by hopes for the U.S.-China trade negotiations, while OPEC-led supply cuts also tightened markets.

“I expect the TOCOM will stay bullish this month, climbing toward a 192-193 yen mark before coming under seasonal selling pressure next month,” Kikukawa said.

TOCOM’s technically-specified rubber (TSR) 20 futures contract for July delivery rose 2.0 percent to close at 155.0 yen per kg.

The most-active rubber contract on the Shanghai futures exchange for May delivery fell 80 yuan to finish at 11,675 yuan ($1,703) per tonne.

The front-month rubber contract on Singapore’s SICOM exchange for February delivery last traded at 137.9 U.S. cents per kg, down 0.8 cents.