TOCOM rubber falls to 1-wk closing low on yen’s surge, Shanghai dip

TOKYO, June 1 (Reuters) – Benchmark Tokyo rubber futures plunged 5 percent on Wednesday to their lowest closing level in nearly one week, as a flurry of selling was sparked by a surge in the yen, slumping Tokyo equities and tumbling Shanghai rubber futures, dealers said. The Tokyo Commodity Exchange (TOCOM) rubber contract for November delivery JRUc6 0#2JRU: finished 8.3 yen, or 5 percent, lower at 157.2 yen ($1.43) per kg, after falling as much as 5.4 percent to 156.6 yen, the lowest since May 26, earlier in the session. “The yen’s strength and weaker Nikkei dampened market sentiment,” said Jiong Gu, an analyst with Yutaka Shoji Co.

The dollar fell against the yen, pulling away from a one-month peak set earlier in the week, with its drop gaining momentum after breaching technical support levels. The dollar shed 0.7 percent to 109.95 yen JPY= , weakening from Monday’s peak of 111.455 yen, which had been the greenback’s strongest level since late April. FRX/ A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.

The Nikkei share average (XC0009692440) fell 1.6 percent, snapping a five-session winning streak, as a stronger yen triggered profit-taking and dimmed the earnings outlook for exporters. .T “A sharp slide in Shanghai futures also added to pressure,” Gu said. The most-active rubber contract on the Shanghai futures exchange for September delivery SNRcv1 dipped 330 yuan to finish at 10,245 yuan ($1,554.84) per tonne. Behind the selling was softer Singapore prices, and the market had little reaction to economic data from top buyer China as the numbers came in line with expectations, dealers said.

The front-month rubber contract on Singapore’s SICOM exchange for July delivery STFc1 last traded at 124.7 U.S. cents per kg, down 2.2 cents. The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) showed activity at China’s factories shrank for a 15th straight month in May.