TOKYO (Feb 3): Benchmark Tokyo rubber futures dropped to a three-week low on Wednesday as slumping prices of oil and other commodities led to a flurry of fresh sells in early trade, while a plunge in local equities added to pressure, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for July delivery <0#2JRU:> finished 3.4 yen, or 2.2%, lower at 153.6 yen (US$1.28) per kg. It dropped to a low of 152.8 yen, the lowest since Jan 14, earlier in the session.
“The market went down as investors were caught by unarticulated anxiety in the face of continued slump in commodity prices,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
US oil futures extended losses into a third session in early Asian trade on Wednesday, but pared losses later following fresh comments from Russia about its openness to talk with OPEC over output cuts, reviving hope among investors that the world’s largest producers could act to boost prices.
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Japan’s Nikkei lost 3.2%, wiping out almost all of its gains made after the Bank of Japan on Friday had announced it would introduce negative interest rates.
The dollar was trading steady at 120 yen, below a six-week high of 121.70 yen hit on Friday after the BOJ’s surprise easing.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, shrugged off stronger-than-expected US auto sales in January which benefited from low gasoline prices, easy credit and moderate economic growth.
“The rubber prices now tend to react more to other commodity prices and equity, instead of its own fundamentals,” Yoshida said.
The most-active rubber contract on the Shanghai futures exchange for May delivery fell 5 yuan to finish at 10,155 yuan (US$1,543.90) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for March delivery last traded at 108.5 US cents per kg, down 0.1 US cent.
(US$1 = 119.8100 yen)
(US$1 = 6.5775 Chinese yuan)
