TOKYO (Aug 24): Benchmark Tokyo rubber futures hit their lowest in over 10-1/2 months on Monday, dragged down by a sharp dive in Shanghai futures and other commodities, a rising Japanese yen against the dollar, and lower Japanese equities.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, came under heavy selling pressure, with investors having sold oil, gasoline and gold on the exchange.
“Overall, new short positions dominated the market,” said a Tokyo-based dealer. “With Shanghai futures also on the heavy decline, it looked like no investors were willing to buy back.”
The Tokyo Commodity Exchange rubber contract for January delivery <0#2JRU:> finished 8.5 yen lower at 175.1 yen ($1.45) per kg. It fell to as low as 174.2 yen, the lowest since Oct. 3, 2014.
The most-active rubber contract for January delivery on the Shanghai Futures Exchange fell as much as 6% to its exchange-set floor of 11,265 yuan ($1,759.36) a tonne. It closed down 5.6% at 11,320 yuan.
The safe-haven yen jumped 1.3% to a three-month high against the dollar on Monday, as a sell-off in riskier assets gathered pace on growing worries about a slowdown in the Chinese economy and global deflationary pressures.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 125.5 US cents per kg, down 6.2 cents.
($1 = 120.4600 yen)
($1 = 6.4029 Chinese yuan)
