TOKYO, Dec 16 (Reuters) – Benchmark Tokyo rubber futures pared gains on profit-taking by close on Friday, after hitting a 3-1/2 year high earlier as the Japanese currency yen fell to its lowest since February. Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, ended higher for a sixth straight day, driven by the yen’s decline to a 10-1/2-month low earlier as markets repositioned for a faster pace of rate rises by the U.S.Federal Reserve over the next year.
USD/ A weaker yen is responsible for TOCOM market strength, but profit-taking kicked in, a Tokyo-based market source said. A weaker yen makes yen-denominated commodities cheaper for holders of other currencies.
The Tokyo Commodity Exchange rubber contract for May delivery JRUc6 0#2JRU: finished 1.2 yen higher at 283.4 yen per kg. The benchmark contract on Friday hit 291.7 yen, the highest since May 22, 2013. For the week, it jumped 15.5 percent, the sharpest gain in five weeks. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 3.8 percent from last Friday, the exchange said on Friday. The most-active rubber contract on the Shanghai futures exchange for May delivery SNRcv1 fell 355 yuan to finish at 19,700 yuan ($2,835) per tonne.
The contract on Wednesday touched a high of 20,580 yuan, the highest since Jan.24, 2014.
The front-month rubber contract on Singapore’s SICOM exchange for January delivery STFc1 last traded at 200 U.S. cents per kg, down 3.8 cents.
($1 = 6.9489 Chinese yuan)
(Reporting by Osamu Tsukimori; Editing by Biju Dwarakanath)
