FB: Tokyo futures up on higher oil, but capped at 160 yen
TOKYO, June 26 (Reuters) - Key Tokyo rubber futures rose 1 percent on Friday, extending gains into a second day as sentiment improved with oil prices recovering to more than $70 per barrel.
* But gains were limited at around 160 yen per kg by selling from traders aiming to lock in profits from a rally from a three-month low of 150.5 yen hit on Wednesday.
* Market participants were cautious about rubber demand despite a rally in equities markets.
* A firmer yen is another factor capping the topside as it deflates yen-based futures prices.
* The key Tokyo Commodity Exchange rubber contract for December delivery rose as high as 160.1 yen, a level last seen on Monday, before retreating to 159.4 yen, a gain of 1.9 yen, or 1.2 percent.
* Investor confidence over the global economy has not fully healed, however, keeping traders from buying further above 160 yen, a level which until recently had provided solid support, traders said.
* 'It looks difficult for the market to gain further momentum because industrial demand has not been catching up with higher prices,' said a manager at a Japanese commodities brokerage.
* Sell orders were lined up at around 163 yen, which is equivalent to a half-way recovery from a 26-yen retracement in the past three weeks from 176 yen to 150 yen, he said.
* TOCOM's then benchmark November contract briefly topped 176 yen in early June, helped by optimism about the global economy.
* U.S. crude oil rose above $70 a barrel on Friday, adding to a 2 percent gain the day before, after rebel attacks on Nigerian oil facilities disrupted supply and equity markets rallied.
* Tokyo's Nikkei stock average rose 0.6 percent after stronger-than expected earnings from a U.S. retailer buoyed hopes that the U.S. economic recession may be easing.
* This week, the U.S. Federal Reserve left interest rates unchanged near zero and said it saw signs that the deep recession was easing. But the Fed also said the interest rates would likely stay unusually low for some time.
* The dollar fell against a basket of currencies on Friday, extending losses made the previous day as investors shifted funds back into risky assets.
* U.S. industry-wide retail auto sales have improved markedly in the first 17 selling days of June from a month ago, indicating a 'tempered but continued' recovery in the market, J.D. Power & Associaties, an influential industry tracking service agency, said on Thursday.
* Bridgestone Corp, Japan's biggest tyre maker, on Thursday lifted its operating profit forecast for 2009 by 24 percent, partly due to falls in material prices.
(Reporting by Chikako Mogi and Risa Maeda; Editing by Joseph Radford)
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