TOKYO (Jan 17): Benchmark Tokyo rubber futures edged down on Wednesday, pulling further away from a 3½-month high hit in the previous session, pressured by weaker Shanghai futures and as investors locked in profits after a recent rally.
“A strong yen also weighed on investors’ sentiment,” said Hiroyuki Kikukawa, general manager of research, Nissan Securities.
The US dollar hit a four-month low of 110.19 yen before steadying around 110.56 yen.
A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
The Tokyo Commodity Exchange (TOCOM) rubber contract for June delivery finished down 3.4 yen, or 1.6%, at 209.5 yen (US$1.89) per kg. In the previous session, it touched 216.3 yen, the highest since Sept. 28.
The most-active rubber contract on the Shanghai futures exchange for May delivery fell 165 yuan to finish at 14,145 yuan (US$2,198) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for February delivery last traded at 152.4 US cents per kg, down 0.4 cent.
“Rubber prices have risen over the past couple of months following a rally in global equities as well as stronger oil prices. If those markets see more corrections, rubber prices will also come under pressure,” Kikukawa said.
Asian equities stepped back from a record high on Wednesday as the region’s resource shares were knocked by falling oil and commodity prices, while digital currencies tumbled on worries about tighter regulations.
Oil prices gave away earlier gains on Wednesday as analysts warned of a downward correction after prices have gained more than 13% over the past month.
(US$1 = 110.8000 yen)
(US$1 = 6.4364 Chinese yuan)
