TOKYO (Feb 5): Benchmark Tokyo rubber futures fell on Friday, ending the week down more than 2%, as investors unwound long positions amid scepticism about the impact of planned export cuts by Asia’s top producers.
The Tokyo Commodity Exchange (TOCOM) rubber contract for July delivery <0#2JRU:> finished 2.5 yen, or 1.6%, lower at 154.8 yen (US$1.33) per kg, after falling as low as 153.8 yen earlier in the session.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, slid 2.2% for the week, marking their second weekly loss.
Asia’s top rubber producers said on Thursday that they have agreed to cut exports by 615,000 tonnes for six months from March, moving to lift prices that have tumbled amid excess supply to their lowest since the global financial crisis.
“But the news did not help much,” said Kaname Gokon, a strategist with Okato Shoji Co.
“Japanese retail investors remained bearish as their agreement was not to cut their output.”
Lower crude oil prices and a stronger yen added to pressure, dealers said.
Crude oil futures reversed earlier gains on Friday as weak fundamentals weighed on markets at the end of a volatile week that saw prices seesaw over 10% within a day.
The US dollar traded flat against the yen at 116.80 yen, close to a two-week low of 116.525 and having erased an upward spike triggered a week ago by the Bank of Japan’s move to adopt negative interest rates.
Trade was thin ahead of the US job report, which could provide clues on the Federal Reserve’s monetary policy outlook, and Lunar New Year holidays next week in China.
The US non-farm payrolls report is expected to show that employers added 190,000 jobs in January, according to aReuters poll. But figures on Thursday showed US jobless claims rose more than expected last week, suggesting labour conditions could be weaker than many believe.
“The TOCOM will likely stay quiet next week as the Shanghai futures market will be shut,” Gokon said.
The most-active rubber contract on the Shanghai futures exchange for May delivery fell 90 yuan to finish at 10,195 yuan (US$1,551.82) per tonne.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.5% from last Friday, the exchange said.
The front-month rubber contract on Singapore’s SICOM exchange for March delivery last traded at 108.8 US cents per kg, down 0.5 US cent.
(US$1 = 116.8200 yen)
(US$1 = 6.5697 Chinese yuan)
