TOKYO (Dec 14): Benchmark Tokyo rubber futures fell for a third session on Monday, ending down 1.1% amid lack of buying interests due to a stronger yen and steep falls in oil prices and Japanese equities, industry sources said.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have also been pressured by ample rubber inventories in Shanghai and worries over demand from top consumer China.
The Tokyo Commodity Exchange rubber contract for May delivery <0#2JRU:> finished 1.8 yen lower at 166.2 yen (US$1.37) per kg, after hitting a low of 165.1 yen, the lowest since Dec 2, earlier in the session.
“There is no buying interest after a series of selling in the last few days,” said a source with a Tokyo-based broker. “A stronger yen and weak Japanese share prices also hurt market sentiment.”
The U.S. dollar was quoted around 121.22 yen, compared with around 121.99 yen on Friday afternoon. A stronger yen makes Japanese currency-denominated assets more expensive when purchased in other currencies.
Japan’s Nikkei stock average tumbled to a six-week low on Monday as global oil prices extended their decline, adding to nervousness ahead of an expected U.S. interest rate hike this week.
Japanese business confidence held steady and companies maintained their bullish spending plans, a quarterly central bank survey showed on Monday, offering some relief to policymakers worried that global headwinds could upset a fragile economic recovery.
China’s output of key industrial commodities including coal and steel remained weak in November amid chronic oversupply as slowing construction demand took its toll.
The most-active rubber contract on the Shanghai Futures Exchange for May delivery rose 170 yuan to finish at 10,230 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for January delivery last traded at 116 U.S. cents per kg, down 0.8 cent.
(US$1 = 121.2600 yen)
