TOKYO, June 13 (Reuters) – Benchmark Tokyo rubber futures dropped sharply to a fresh 9-month low on Thursday as a jump in the yen and a steep fall in equities prices triggered a wave of selling.
Japanese stocks plunged over 6 percent into bear market territory and Asian shares slid to nine-month lows on Thursday, as investors rushed for the exits as the prospect of reduced stimulus from central banks hit markets.
The yen soared as the slide in Japanese shares forced a clean-out of long-dollar positions, while uncertainty on whether the Federal Reserve would scale back its massive stimulus also undermined the U.S. currency.
“We just blame on the dollar/yen and equities, and that made the trend totally bearish,” said Gu Jiong, analyst at Yutaka Shoji Co. “Looking ahead, if the dollar/yen somewhat stabilises after the recent heavy sell-off and recovers by 2 yen or so, that could help lift the TOCOM market by 4-5 yen.”
The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for November delivery fell 8.8 yen to settle at 231.3 yen ($2.4) per kg.
The contract earlier sank as low as 230.5 yen, the lowest level since Sept. 10 2012.
Traders paid little attention to an extended fall in crude rubber stocks in Japan as the pace of decline was as usual.
Data from the Rubber Trade Association of Japan showed on Thursday inventories at Japanese ports as of May 31 fell to 14,244 tonnes, down 654 tonnes over an 11-day period to the lowest level since March 10.
In China, the rubber market resumed trading after a 3-day holiday and closed sharply lower on Thursday, catching up with the recent declines in the TOCOM market.
The most-active rubber contract on the Shanghai futures exchange for September delivery was last traded at 17,750 yuan ($2,900) a tonne, down 560 yuan from the previous close.
The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 229.50 U.S. cents per kg, down 3.3 cents.
($1 = 6.1335 Chinese yuan)
($1 = 95.6950 Japanese yen)
(Reporting by Yuka Obayashi and Risa Maeda; editing by Keiron Henderson)
Source: Reuters
