TOCOM rubber snaps 2-day losing streak on weaker yen

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TOKYO ( 12): Benchmark futures snapped a two-day losing streak on Tuesday on the back of a weaker yen, but higher inventories kept prices anchored around a two-week low hit a day earlier.

The dollar edged up to a three-week high against the yen on Tuesday amid hopes that the closely-watched US-North Korea summit could pave the way for a reduction in tensions between the two old foes. A weaker yen makes commodities denominated in the Japanese currency cheaper for holders of other currencies.

The Tokyo Commodity Exchange rubber contract for November delivery finished 1.6 yen higher at 186.5 yen (US$1.69) per kg.

However, the Tokyo Commodity Exchange () futures, which set the tone for rubber prices in Southeast Asia, still traded around the two-month low of 184.3 yen hit a day earlier, as the market has been weighed by high inventories in Japan and other consuming nations.

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“Simply put, the inventories are too high,” said a Japanese trading source.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 5 yuan to finish at 11,400 yuan (US$1,780) per tonne.

The Shanghai Futures Exchange (ShFE) said on Tuesday that China’s securities regulator had approved the launch of technically specified rubber () 20 futures on the exchange.

The contract will have the same trading policies as Shanghai’s futures, meaning foreign investors will be allowed to trade, ShFE said in a statement, although no launch date for the rubber futures was given.

The front-month rubber contract on Singapore’s SICOM exchange for delivery last traded at 140.8 US cents per kg, up 0.6 cent.

(US$1 = 110.3400 yen)
(US$1 = 6.4032 Chinese yuan)

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