Rubber dropped for a second day, heading for the worst weekly loss since June, as the Japanese currency strengthened to near a one-week high against the dollar, reducing the appeal of the yen-based contracts.
Futures for February delivery on the Tokyo Commodity Exchange fell as much as 2.3 percent to 271.6 yen a kilogram ($2,721 a metric ton), the lowest since Sept. 2, and was at 272.8 yen at 10:42 a.m. local time. Prices lost 3.5 percent this week, the biggest drop since the five days through June 14.
The yen appreciated to 99.02 a dollar yesterday, the strongest since Sept. 6, ahead of a decision likely on Oct. 1 on tax changes in world’s third-largest economy that raised demand for the currency as a haven.
“Futures retreated as they lost support from the currency market,” said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo. “Prospects for the Federal Reserve to taper stimulus also put a drag on the market.”
The Fed will decide to cut its $85 billion in monthly bond purchases this month, according to 65 percent of economists surveyed by Bloomberg from Aug. 9-13. The Federal Open Market Committee holds a two-day meeting on Sept. 17-18.
The contract for January delivery in Shanghai fell for a second day, losing 0.3 percent to 20,175yuan ($3,297) a ton. Thai rubber free-on-board declined 1.7 percent to 84.65 baht ($2.67) a kilogram yesterday, according to the Rubber Research Institute of Thailand.
Source: Bloomberg
