TOKYO, Aug 16 (Reuters) – Benchmark Tokyo rubber futures ended lower on Tuesday, sliding from a fresh three-week high, hit earlier in the session, as a surge in yen against the U.S.dollar dampened sentiment and prompted profit-taking, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery JRUc6 0#2JRU: ended down 1.8 yen, or 1.1 percent, at 157.1 yen ($1.57) per kg, after hitting a high of 160.2 yen, the highest since July 25. The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, rose in an early trade on the back of stronger Shanghai futures, but selling pressure kicked in after a yen rose to a one-month high against the U.S.dollar and oil prices dropped.
“Risk appetite, supported by the recent rally in oil prices, receded after the yen’s gain and weaker oil market,” said Satoru Yoshida, commodity analyst, Rakuten Securities. The dollar fell a full yen to a one-month low against the Japanese currency after recent U.S.economic data were seen likely to limit the prospects of a near-term Fed interest rate hike.
The dollar traded as low as 100.15 yen, its lowest since the aftermath of the Brexit vote. FRX/ A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
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Oil prices edged away from a five-week high on Tuesday, with traders cashing in on a 16-percent rally since early August that has largely been fuelled by talk of producers taking action to prop up the market. O/R “The TOCOM has failed to stay above 160 yen in June and July.
I don’t expect any quick rally from here,” Yoshida said. The most-active rubber contract on the Shanghai futures exchange for January delivery SNRcv1 rose 45 yuan to finish at 13,100 yuan ($1,977.57) per tonne. The front-month rubber contract on Singapore’s SICOM exchange for September delivery STFc1 last traded at 132.4 U.S. cents per kg, down 0.9 cent.
($1 = 6.6243 Chinese yuan) ($1 = 100.2600 yen)
