3.4 C
New York
Tuesday, January 25, 2022

TOCOM falls as yen gains after Fed’s cautious statement

TOCOM falls as yen gains after Fed's cautious statementTOKYO: Benchmark Tokyo rubber futures fell on Thursday, weighed by the yen’s rise against the U.S. dollar in the wake of a much more cautious Federal Reserve statement on interest rates than expected.

The Tokyo Commodity Exchange (TOCOM) rubber contract for August delivery finished 0.7 yen, or 0.3 percent, lower at 210.8 yen ($ 2) per kg.

The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, earlier moved higher on the back of a recovery in oil prices, but ran out of steam later due to the yen’s gain, dealers said.

“The market was under pressure as the yen climbed after the Fed statement,” a Tokyo-based trader who declined to be named said.

Against the yen, the greenback slid as low as 119.29 overnight, its lowest since Feb. 27, trading below 120.00 for the first time in nearly three weeks. It recovered some ground to 120.69 yen, up about 0.5 percent on the day.

Brent had rallied by more than $ 2 a barrel on Wednesday after the Fed indicated it would follow a more gradual path to raising U.S. interest rates, but fell back to $ 55 on Thursday after Kuwait said OPEC had no choice but to keep production steady, refocusing the market on global oversupply.

Some rubber-producing regions in Southeast Asia have been in the wintering period, when rubber trees become drier, resulting in lower yields, but market gains have been capped as some investors worry about the possible release of rubber stockpiles by the Thai government which had bought the soft commodity from the market to shore up prices, the trader added.

Last October, Thailand’s cabinet passed a 58 billion baht ($ 1.77 billion) subsidy plan to support rubber farmers who, reeling from a slump in global prices of the commodity, have threatened protests against the country’s military-led government.

The most-active rubber contract on the Shanghai futures exchange for September delivery rose 50 yuan to finish at 12,540 yuan ($ 2,024) per tonne.

The front-month rubber contract on Singapore’s SICOM exchange for April delivery last traded at 142.40 U.S. cents per kg, down 0.4 cent.

Copyright Reuters, 2015

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles