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Monday, January 24, 2022

Rubber Drops as Yen Rebounds, U.S. Data Raise Demand Concerns

Rubber declined for a second day as the Japanese currency traded near a one-month high against the dollar, cutting the appeal of yen-based futures, and after U.S. jobs and factory data missed estimates.

The contract for delivery in November fell as much as 2.3 percent to 251.2 yen a kilogram ($2,528 a metric ton) and was at 252.5 yen on the Tokyo Commodity Exchange at 10:08 a.m. Futures extended losses for this year to 16 percent.

The yen climbed to 98.86 per dollar, the highest level since May 9. Companies in the U.S. hired fewer workers than projected last month, the ADP Research Institute reported yesterday, while separate data showed growth in service industries and factory orders.

“Risk-aversion by investors increased demand for the yen as a haven, which is negative for futures in Tokyo,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone.

Futures were also weighed down by concerns about slowing growth in China, the world’s largest consumer, he said. China’s outbound shipments may have grown 7.1 percent in May from a year earlier, less than half the previous month’s reported 14.7 percent, based on the median estimate of 34 economists ahead of data due June 8. Import growth probably slowed to 6.9 percent from April’s 16.8 percent, a Bloomberg News survey showed.

Thai rubber free-on-board dropped 0.3 percent to 88.15 baht ($2.88) a kilogram yesterday, the lowest level in a month, according to the Rubber Research Institute of Thailand. Rubber for delivery in September on the Shanghai Futures Exchange fell 0.7 percent to 18,680 yuan($3,049) a ton.

Source: Bloomberg

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