TOKYO (Feb 22): Benchmark Tokyo rubber futures fell on Thursday, snapping a three-session rally, as a stronger yen, lower oil prices and plunging Tokyo stock market weighed on market sentiment, dealers said.
The dollar lost ground against the yen, falling 0.4% to 107.36. The Japanese currency gained broadly as speculation of a faster pace of US rate hikes soured investors’ risk appetites and dented equities.
A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
The Tokyo Commodity Exchange (TOCOM) rubber contract for July delivery finished 0.9 yen lower at 185.1 yen (US$1.72) per kg. Its February contract expired at 179 yen on Thursday.
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“In addition to the yen’s gain, weaker oil prices and sliding Nikkei index added to pressure,” said Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co.
Oil prices fell on Thursday, pulled down as a firmer dollar against major currencies except for yen outweighed a report of a decrease in US crude inventories.
Japan’s Nikkei share average fell 1.1% on across-the-board selling after US shares dropped overnight on speculation about faster interest rate hikes.
Chinese financial markets reopened on Thursday after the week-long Lunar New Year break.
The most-active rubber contract on the Shanghai futures exchange for May delivery rose 40 yuan to finish at 12,500 yuan (US$1,965) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for March delivery last traded at 144.0 US cents per kg, down 0.4 cent.
(US$1 = 6.3609 Chinese yuan)
(US$1 = 107.3400 yen)
