TOKYO (May 23): Benchmark Tokyo rubber futures slipped on Wednesday from a near four-month high hit in the previous session, hurt by a firmer yen against the dollar on fears that setbacks to US-China trade talks would undermine increasingly fragile-looking world growth.
The yen rose 1% against the dollar amid negative sentiment after US President Donald Trump’s comments on the crucial trade talks.
The Tokyo Commodity Exchange (TOCOM) rubber contract for October delivery finished 2.5 yen lower at 196.5 yen (US$1.8) per kg, sliding from Tuesday’s high of 202.1 yen, which marked the highest since Jan 29.
A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
The risk-off mood was initially triggered by Trump saying he was not pleased with progress on trade talks with China.
The comments tempered earlier optimism that China and the United States would be able to avert a damaging global trade war. US Treasury Secretary Steven Mnuchin had said earlier the “trade war” was “on hold”.
“A sharp slide in Shanghai futures also put pressure on the TOCOM,” said a Tokyo-based dealer.
The most-active rubber contract on the Shanghai futures exchange for September delivery dipped 320 yuan to finish at 11,860 yuan (US$1,857) per tonne, paring earlier gains.
The front-month rubber contract on Singapore’s SICOM exchange for June delivery last traded at 144.0 US cents per kg, down 3.3 cent.
(US$1 = 6.3861 Chinese yuan)
(US$1 = 109.6600 yen)
