TOKYO (April 4): Benchmark Tokyo rubber futures rose on Monday, helped by bargain-hunting, but falls in oil prices and the yen’s rise after stronger-than-expected US economic data boosted expectations of a less dovish Federal Reserve, limited gains.
The Tokyo Commodity Exchange (TOCOM) rubber contract for September delivery <0#2JRU:> finished 1.6 yen higher at 178.4 yen (US$1.60) per kg.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have climbed more than 10% so far this year, amid the dry wintering season in Southeast Asia and reduced exports by Asian rubber producers.
Rubber is tapped year round but latex output drops during the dry wintering season, when trees shed leaves.
“Gains were capped by falling oil prices and the yen’s jump,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
Oil fell on Monday as investors ditched some of their bullish bets on another price rise and the chances that top exporters will agree to rein in overproduction appeared to fade.
The dollar slipped against the yen to 111.54, less than one yen away from a 1½-year low of 110.67 touched last month, after the solid US job data.
US employment increased strongly in March, underscoring the economy’s resilience, but an influx of Americans into the labour market could temper nascent wage growth and keep the Federal Reserve cautious about further interest rate increases.
A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
Slack US automobile sales also weighed on the market, dealers said.
General Motors, Fiat Chrysler Automobiles and other major automakers reported weaker-than-expected US sales for March, hurt by declining demand for sedans and light dealer traffic during the Easter weekend.
“The TOCOM turnover was quite low, meaning the market could be volatile to upside or downside when investors step up trades,” Yoshida said.
The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 135.1 US cents per kg, up 1.8 US cent.
The Shanghai futures exchange was closed for a national holiday.
(US$1 = 111.6200 yen)
