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Thursday, October 21, 2021

TOCOM rubber snaps three-day rally on profit-taking

TOKYO (Sept 26): Benchmark Tokyo rubber futures snapped a three-day winning streak on Monday as investors took profits after a surge last week and as weaker Shanghai weighed on market sentiment.

The Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery <0#2JRU:> finished down 0.5 yen, or 0.3%, at 168.5 yen (US$1.68) per kg, falling from a four-month high, hit in the previous session. Earlier in the session, it hit a high of 170.4 yen.

The September delivery expired on Monday at 175.5 yen.

The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, jumped 7.2% last week, breaking through the 170 yen mark for the first time in four months.

“Technical selling kicked in after the sharp gain last week,” said Satoru Yoshida, commodity analyst, Rakuten Securities.

“The TOCOM has risen fast without much of an increase in trading volume, which means the further climb may be limited,” he said.

The most-active rubber contract on the Shanghai futures exchange for January delivery fell 25 yuan to finish at 13,450 yuan (US$2,016.95) per tonne.

The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 141.0 US cents per kg, down 2.3 cents.

“The currency and stock markets may react to the first US presidential debate, but any moves are expected to be short-lived,” Yoshida said.

Voters in the US will rely on the presidential debates, that will take place later in the day, to help them make their choice between Republican Donald Trump and Democrat Hillary Clinton in the Nov. 8 election, according to aReuters/Ipsos poll released on Monday.

The dollar slipped 0.2% to 100.86 yen on Monday, moving back toward a one-month low of 100.10 touched last week.

Japan’s Nikkei index fell on Monday, with a strong yen souring overall sentiment.

(US$1 = 100.5800 yen)
(US$1 = 6.6685 Chinese yuan)

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