Rubber traded near a one-week low as the Japanese currency extended its advance against the dollar, weakening the appeal of yen-denominated contracts.
The contract for March delivery on the Tokyo Commodity Exchange, which became the most-active today, dropped as low as 274.3 yen a kilogram ($2,788 a metric ton), approaching a one-week low for futures of 271.2 yen reached yesterday. Rubber traded at 274.9 yen at 10:15 a.m. and headed for the first quarterly advance since the three months through December.
The yen climbed to 98.27 per dollar, the highest level since Sept. 19, amid concern that budget talks in Washington risk a federal government shutdown, sparking demand for the relative safety of Japan’s currency.
“Risk aversion by investors increased on a lack of progress in the U.S. budget talks,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo.
Futures also came under pressure as oil in New York extended losses for a sixth day, the longest losing streak in 16 months, raising speculation the price of competing synthetic rubber may weaken, he said.
Rubber for January delivery on the Shanghai Futures Exchange fell 0.6 percent to 20,455 yuan($3,342) a ton. Chinese markets will be closed Oct. 1-7.
Thai rubber free-on-board dropped 0.3 percent to 82.25 baht ($2.62) a kilogram yesterday, according to the Rubber Research Institute of Thailand.
Source: Bloomberg
