Rubber declined the most in a week on concern that demand for the commodity will weaken asEurope’s debt crisis is deepening and pending U.S. home sales fell.
The contract for delivery in September fell as much as 2.2 percent, the most since March 22, to 276.4 yen a kilogram ($2,936 a metric ton) on the Tokyo Commodity Exchange and was at 276.7 yen at 10:49 a.m. Futures have lost 8.5 percent this year.
Asian stocks fell and Japanese currency strengthened as a bailout for Cyprus and a political deadlock in Italy raised concerns the region’s debt crisis is deepening. Fewer Americans signed contracts to purchase previously owned homes in February, indicating a pause in momentum for an industry that is helping power the economy.
“Market players become very sensitive about Italian political problem and Cyprus,” said Naohiro Niimura, a partner at research company Market Risk Advisory in Tokyo. “Weak U.S. economic data are also bearish.”
The Institute of International Finance said yesterday banks in Portugal, Spain and Italy may come under funding pressure after a deal earlier this week in Cyprus rescued the island’s financial system at the expense of bank creditors.
The contract for September delivery on the Shanghai Futures Exchange dropped 0.9 percent to 22,435 yuan ($3,610) a ton. Thai rubber free-on-board gained 0.3 percent to 86.80 baht ($2.97) a kilogram yesterday, according to the Rubber Research Institute of Thailand.
Source: Bloomberg
