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TOCOM rubber books near 5 pct weekly drop on China worries

TOKYO (Aug 7): Benchmark Tokyo rubber futures dropped on Friday, ending the week down nearly 5 percent in their third weekly decline, as investors unwound long positions ahead of the U.S. jobs data and weighed down by worries about China’s demand.

The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery <0#2JRU:> finished 3.8 yen, or 1.9 percent, lower at 193.4 yen ($1.55) per kg, near Tuesday’s 6-1/2-month low of 192.4.

TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, lost 4.9 percent for the week, the biggest weekly loss in five months.

“Most of the trades today were position adjustment ahead of the U.S. jobs data,” said Jiong Gu, analyst at Yutaka Shoji Co.

The number of U.S. jobs probably rose at a healthy pace in July and wages likely rebounded in data due at 1230 GMT, providing further signs of an improving economy that could allow the Federal Reserve to raise interest rates in September.

The dollar against the yen stood little changed at around 124.70 yen in late Asian trade on Friday.

“If the dollar climbs above 125 yen after strong U.S. data, rubber prices may rebound early next week. But overall sentiment is expected to remain weak, with focus on China,” Gu said.

The most-active rubber contract on the Shanghai futures exchange for January delivery fell 55 yuan to finish at 12,110 yuan ($1,950.49) per tonne.

The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 136.8 U.S. cents per kg, down 0.7 cent.

($1 = 124.7300 yen)
($1 = 6.2087 Chinese yuan renminbi)

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