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Sunday, May 29, 2022

Rubber declines most in three weeks as yen rebounds from five-year low

TOKYO:Rubber in Tokyo declined the most in three weeks as Japan’s currency rebounded from a five year low before a US Federal Reserve policy meeting today, cutting the appeal of the yen-denominated commodity.

Futures for delivery in May on the Tokyo Commodity Exchange dropped 0.9 per cent to end at 281.1 yen a kilogram ($2,730 a tonne) after rising 1.1 per cent earlier on Tuesday. The most-active contract touched 287.9 yen on Monday, the highest intra- day level since September 9. The Fed may begin cutting economic stimulus at its December 17-18 meeting, according to 34 per cent of economists in a December 6 Bloomberg survey, up from 17 per cent in a November 8 poll.

“The strengthening yen prompted investors to take profits while waiting for the result of Fed meeting,” Navarat Kaewpratarn, a senior marketing official at Future Agri Trade, said by phone from Bangkok. Losses were capped by speculation of increasing Chinese demand, she added.

China, the largest rubber consumer, bought 87,200 tonne for government stockpiles on Monday, said three executives with direct knowledge of the transactions. Car sales in China surged 14 per cent in November to 2 million units, China Automotive Information Network said on Tuesday.

Thailand, the biggest rubber producer, will resume collecting fees on shipments from January after a four-month exemption, according to Office of the Rubber Replanting Aid Fund.

The contract for May delivery on the Shanghai Futures Exchange fell 1.9 per cent to close at 19,410 yuan ($3,197) a tonne. Thai rubber free-on-board dropped 0.4 per cent to 83.35 baht ($2.60) a kilogram on Tuesday, according to the Rubber Research Institute of Thailand.

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