TOKYO (Sept 10): Benchmark Tokyo rubber futures fell on Thursday, snapping a three-day rally, due to profit-taking as weak Japanese machinery orders sparked fears over the economy and led a slide in Tokyo stock market.
The rubber market however regained some ground later in the day due to a softer yen.
The Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery <0#2JRU:> finished 1.4 yen, or 0.8%, lower at 172.9 yen ($1.43) per kg. It earlier fell to a low of 169.5 yen.
“The rubber prices were dragged down by profit-taking following a sharp decline in Nikkei stock index in early trade,” Jiong Gu, an analyst at Yutaka Shoji Co said.
Related Post
Japanese stocks fell on Thursday as a surprise drop in machinery orders in July heightened concerns about the economy, prompting investors to book profits a day after the market posted its biggest gain in nearly seven years.
Core machinery orders in Japan unexpectedly fell for a second straight month in July, fuelling concerns that weak business investment could undermine a recovery from an economic contraction in the second quarter.
“But the market recovered a bit later on a softer yen and as some investors believed that selling on financial markets’ turmoil has been mostly done,” Gu said, adding investors’ focus may slowly shift back to demand and supply.
The dollar briefly rose against the yen to 121.38 yen, its highest since Aug 31, after Bloomberg quoted Japanese ruling Liberal Democratic Party lawmaker Kozo Yamamoto as saying that the BOJ’s policy meeting on Oct 30 would be a “good opportunity” for additional monetary easing.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 35 yuan to finish at 11,765 yuan ($1,844.91) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 125.9 US cents per kg, unchanged from the previous day.
($1 = 120.9900 yen)
($1 = 6.3770 Chinese yuan)
