TOKYO, Aug 7 (Reuters) – Benchmark Tokyo rubber futures dropped in slim trade on Wednesday as the yen hit a six-week low against the dollar, pressurising prices for the soft commodity.
The key rubber contract on the Tokyo Commodity Exchange (TOCOM) for January delivery fell 1.4 percent to settle at 246.4 yen per kg.
The yen was quoted at 96.87 to the dollar in afternoon Asia trade, after touching 96.19, its lowest level since June, earlier in the day.
“There were three main reasons behind the drop today: the stronger yen, the stronger yen, and the stronger yen,” said Toshitaka Tazawa, an analyst at Tokyo-based Fujitomi Co, who added that several of the other commodities traded in Tokyo also fell.
A stronger yen makes Japanese currency-denominated assets less affordable when purchased in other currencies.
Adding to the rubber contract’s woes, Japan’s Nikkei benchmark tumbled 4 percent on Wednesday, its worst one-day percentage loss since mid-June, on the stronger yen.
Trading volume was thin with 5,869 contracts changing hands on the day, less than the daily average of 7,504 year-to-date and 8,232 last year, as investors took summer holidays.
The most-active rubber contract on the Shanghai futures exchange for January delivery edged up 0.1 percent to finish at 18,280 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 226.10 U.S. cents per kg, or one percent lower.
(Reporting by James Topham; Editing by Supriya Kurane)
