TOKYO, Feb 5 (Reuters) – Benchmark Tokyo rubber futures on Tuesday dropped from a 10-month high hit the day before, with investors taking profits in shares and other riskier assets after recent rallies.
But ongoing monetary easing from major central banks continued to underpin sentiment, analysts and traders said.
The most-active rubber contract on the Tokyo Commodity Exchange (TOCOM) for July delivery fell 1.8 yen, or 0.5 percent, to settle at 331.5 yen ($3.6) per kg.
“A halt in the rally in the Tokyo stock market mainly prompted selling in the rubber market. There’s a stronger correlation than before between rubber and the Nikkei share average,” said Satoru Yoshida, a commodity analyst at Dot Commodity.
Increasing uncertainty over the prospects for a further weakening in the yen is also making investors reluctant to push rubber prices higher, he added.
The dollar stood at around 92.20 yen, having touched a fresh 33-month high near 93.19.
On Monday, the benchmark TOCOM rubber contract rose as far as 337.4 yen, the highest for any benchmark since late March, helped by a fall in the yen.
A weaker yen makes dollar-based commodities more expensive and encourages market participants to take speculative buying positions in TOCOM rubber.
In the physical market, China, the world’s biggest rubber consumer, shrugged off rising prices in the past week and bought several cargoes of Thai and Indonesian rubber as tyre makers stocked up before the Lunar New Year holiday, dealers said on Tuesday.
The most-active rubber contract on the Shanghai Futures Exchange for May delivery rose 40 yuan to 26,810 yuan ($4,300) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for March delivery last traded at 310.50 U.S. cents per kg, down 2.4 cents. ($1 = 6.2328 Chinese yuan) ($1 = 92.6950 Japanese yen)
(Reporting by Risa Maeda; Editing by Joseph Radford)
SOurce: Reuters
