TOKYO (Jan 21): Benchmark Tokyo rubber futures inched down on Thursday, dragged down by a slide in Tokyo equities and the U.S. dollar against the safe-haven yen, as further sell-offs in crude oil futures hurt investors’ risk appetite.
The Tokyo Commodity Exchange rubber contract for June delivery finished 0.2 yen lower at 156.5 yen (US$1.34) per kg.
“The afternoon plunge in Tokyo equities market added to pressure, while the yen’s strength prompted fresh sells,” said Hiroyuki Kikukawa, general manager at Nihon Unicom Inc.
“A broad slump in global financial markets led by falling oil prices soured investors’ mind.”
Oil prices dipped, erasing modest early gains as analysts said a persistent global surplus of crude would keep pressuring the market.
International benchmark Brent was down 30 cents at US$27.58, after hitting its lowest since 2003 in the previous session.
Japanese stocks suffered another big sell-off in a roller-coaster session, ending down 2.4%, as foreign investors bailed out in the afternoon, after a rebound in oil petered out.
The dollar surrendered its gains, turning back toward a one-year low against its perceived safe-haven Japanese counterpart.
A stronger yen makes yen-denominated assets more expensive, when purchased in other currencies.
“The market is expected to remain bearish, reflecting a turmoil in global commodity markets,” Kikukawa said.
The most active rubber contract on the Shanghai futures exchange for May delivery fell 80 yuan to finish at 10,200 yuan (US$1,550.69) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for February delivery last traded at 108.1 U.S. cents per kg, down 0.9 cent.
(US$1 = 116.6800 yen)
(US$1 = 6.5777 Chinese yuan)
