TOKYO, June 1 (Reuters) – Benchmark TOCOM rubber futures fell 3 percent on Wednesday, hit by lower oil prices and a stronger yen, while an overnight fall in Shanghai futures also added to pressure.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for November delivery JRUc6 0#2JRU: was down 4.9 yen, or 3.0 percent, at 160.6 yen ($1.45) per kg as of 0029 GMT, after booking a 15 percent drop in May. RUB/T
The most-active rubber contract on the Shanghai futures exchange for September delivery SNRcv1 fell 140 yuan to 10,435 yuan ($1,585.91) per tonne in an overnight trade.
Growth in China’s vast manufacturing sector likely stalled in May after slight expansions in the previous two months, a Reuters poll showed, throwing more cold water on hopes that the world’s second-largest economy is reviving.
The official manufacturing PMI data is due later on Wednesday.
Japanese Prime Minister Shinzo Abe is expected to announce on Wednesday that the government will delay a scheduled sales tax hike by two-and-a-half years, but will likely bow to pressure from his coalition partner not to call a snap general election.
Ivory Coast’s natural rubber exports totalled 156,480 tonnes in the first four months of the year, up nearly 17 percent from the same period last year, provisional port data showed on Tuesday.
MARKET NEWS
Oil prices dipped on Tuesday as a stronger dollar and slide in equity prices sparked profit-taking, but crude futures posted a fourth straight monthly gain as investors bet that the global glut was slowly easing.
The yen JPY= bounced back to 110.60 yen per dollar early on Wednesday, off Monday’s one-month low of 111.455, though expectations of a possible Federal Reserve interest rate increase lifted the dollar to near a two-month high against a basket of currencies. FRX/ A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
Japan’s benchmark Nikkei stock average (XC0009692440) was down 0.8 percent in Wednesday trade, after U.S.stock prices fell the previous day on weaker-than-expected economic data.
DATA/EVENTS (GMT)
The following data is expected on Wednesday: (Time in GMT)
0100 China Official manufacturing PMI May
0100 China Official non-manufacturing PMI May
0145 China Caixin manufacturing PMI final May
0755 Germany Markit/BME manufacturing PMI May
0800 Euro zone Markit manufacturing PMI final May
1400 U.S. Construction spending Apr
1400 U.S. ISM manufacturing PMI May
($1 = 110.5700 yen)
($1 = 6.5798 Chinese yuan renminbi)
(Reporting by Yuka Obayashi; Editing by Ed Davies)
