TOKYO (July 13): Benchmark Tokyo rubber futures fell on Thursday from a one-week high and key 200-yen mark scaled in the previous session, as investors locked in profits after the yen rose against the dollar, following the U.S. Federal Reserve Chair Janet Yellen’s remark.
The U.S. economy is healthy enough for the Fed to raise rates and begin winding down its massive bond portfolio, though low inflation and a low neutral rate may leave the central bank with diminished leeway, Fed’s Yellen said on Wednesday.
The greenback extended overnight losses and was 0.2% lower at 112.96 yen in late Asia trade on Thursday, pulled back from a four-month high near 114.495 scaled earlier in the week, on expectations of U.S.-Japan monetary policy divergence.
A stronger yen makes yen-denominated assets less affordable, when purchased in other currencies.
The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery finished 1.9 yen lower at 199.9 yen (US$1.8) per kg.
The most active rubber contract on the Shanghai futures exchange for September delivery rose 45 yuan to finish at 13,245 yuan (US$1,953) per tonne.
“Still, an overall market sentiment both in Tokyo and Shanghai remains weak, due to worries about slowing automobile demand worldwide and oversupply in Asia,” a Tokyo-based dealer said.
“I expect the markets to stay under pressure,” he added.
The front-month rubber contract on Singapore’s SICOM exchange for August delivery last traded at 147.8 U.S. cents per kg, down 0.6 cent.
(US$1 = 113.0800 yen)
(US$1 = 6.7815 Chinese yuan)
