TOKYO (Dec 28): Benchmark TOCOM rubber futures slipped on Thursday, sliding from a three-month high hit the previous day, as investors unwound positions ahead of new year holidays, while a stronger yen against the US dollar added to pressure.
“Trade was thin as many Japanese traders closed books for this year on Thursday and some investors were already away for new year holidays,” said a Tokyo-based dealer who declined to be named.
The Tokyo Commodity Exchange (TOCOM) rubber contract for June delivery finished 2.2 yen, or 1.0%, lower at 209.6 yen (US$1.86) per kg.
It hit its highest since Sept 28 at 213.8 yen in the previous session.
The exchange will be closed from Monday to Wednesday next week.
The US dollar slid broadly on Thursday, hampered by a recent dip in US 10-year bond yields. Against the yen, it slid 0.5% to 112.78 yen.
A higher yen makes yen-denominated assets less affordable when purchased in other currencies.
The most-active rubber contract on the Shanghai futures exchange for May delivery fell 80 yuan to finish at 14,200 yuan (US$2,173) per tonne.
“Rubber prices are expected to stay under pressure next year unless top producers cut output to help reduce inventory overhang as demand is predicted to increase only by 1-2% from this year,” the dealer said.
The front-month rubber contract on Singapore’s SICOM exchange for January delivery last traded at 147 US cents per kg, down 1.9 cent.
(US$1 = 112.7700 yen)
(US$1 = 6.5335 Chinese yuan)
