TOKYO (Dec 16): Benchmark Tokyo rubber futures fell for a fifth session on Wednesday, hitting a 3-week low, as investors unwound long positions amid slumping oil and commodity prices.
The Tokyo Commodity Exchange (TOCOM) rubber contract for May delivery <0#2JRU:> finished 1.1 yen, or 0.7%, lower at 161.0 yen (US$1.32) per kg, after touching a low of 160.6 yen, the lowest since Nov 26.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have been weighed down by weak commodity prices and nagging concerns over weakening demand in top buyer China.
Weaker oil prices offset a surge in the Tokyo stock market, dealers said.
Related Post
Crude oil fell in Asian trade on Wednesday, snapping gains that pulled prices back from testing 11-year lows, as investors awaited the outcome of a Federal Reserve meeting, where interest rates are likely to be raised.
Japanese stocks posted the biggest daily percentage gain in 2½ months on Wednesday, with sentiment helped by broad gains on Wall Street before an expected rise in U.S. rates later in the day.
“As investors become uncertain about the direction of the U.S. dollar against the yen after the U.S. rate hike, they become hesitant to take fresh buying,” said Satoru Yoshida, commodity analyst at Rakuten Securities.
The dollar fell back from a near one-week high versus a basket of major currencies on Wednesday, with losses limited in the countdown to an expected U.S. rate hike. Against the yen, the greenback inched up 0.1% to 121.71 yen.
The Fed is widely expected to deliver its first rate increase in nearly a decade at 1900 GMT. After more than a year of anticipation, investors are more eager to know how quickly the central bank will tighten following the initial rate adjustment.
“It looks that the TOCOM will likely stay at around 160 yen this month as most of investors don’t want to make a big bet before the end of the year,” Yoshida said.
The most-active rubber contract on the Shanghai futures exchange for May delivery fell 70 yuan to finish at 10,180 yuan (US$1,572.86) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for January delivery last traded at 115.1 U.S. cents per kg, down 0.7 cent.
(US$1 = 6.4723 Chinese yuan renminbi)
(US$1 = 122.0100 yen)
