TOKYO, Jan 12 (Reuters) – Benchmark TOCOM rubber futures dropped to a fresh 7-year low on Tuesday, dragged down by worries over Beijing’s ability to bolster its economy and as plunging prices of oil and other commodities prompted selling.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for June delivery JRUc6 0#2JRU: were down 3.3 yen, or 2.2 percent, at 146.5 yen per kg by 0054 GMT, having earlier fallen more than three percent to 144.5 yen, the lowest since March 19 2009.
Rubber slid 6 percent last week, its biggest percentage fall in four months.
Japanese markets were closed on Monday for a national holiday.
China guided its yuan currency higher on Monday, and offshore it surged against the dollar, spurred by what traders called aggressive intervention by Beijing, although Chinese stocks tumbled again as doubts persisted over policymakers’ intent.
Thailand’s prime minister on Monday promised help for farmers in the world’s top rubber producer and exporter, amid threats by farmers to protest if their demands for a guaranteed selling price are not met.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 2.8 percent from a week earlier, the exchange said on Friday.
Crude rubber inventories at Japanese ports stood at 9,767 tonnes as of Dec. 20, up 4.7 percent from the last inventory date, data from the Rubber Trade Association of Japan showed on Friday.
MARKET NEWS
Japan’s benchmark Nikkei stock average (XC0009692440) was down 1.4 percent in Tuesday trade, as investors fretted over whether Beijing may be losing control of the economy. MKTS/GLOB
China stocks closed down on Monday at their lowest since September, following weak inflation data over the weekend and continuing investor anxiety over the economy and the trajectory of the yuan.
U.S.crude prices continued a relentless dive early on Tuesday, approaching a 20 percent drop since the beginning of the year as analysts scrambled to cut their 2016 oil price forecasts and traders bet on further price falls.
Copper prices plummeted on Monday to their lowest in 6-1/2 years as large losses on Chinese equity markets reinforced tarnished prospects for growth and demand in the world’s biggest consumer of industrial metals. MET/L
The U.S. dollar was steady from late North American trade at 117.80 JPY= early on Tuesday, after plumbing a low of 116.70 on Monday, its deepest nadir since Aug.24.
DATA/EVENTS (GMT)
The following data is expected on Tuesday: (Time in GMT)
- 0930 Britain Industrial output Nov
- 1100 U.S. NFIB business optimism Dec
(Reporting by Yuka Obayashi; Editing by Richard Pullin)
