Rubber headed for the biggest weekly loss since May as concern that the U.S. political impasse could lead to a recession boosted the Japanese currency and cut the appeal of yen-denominated futures.
The contract for March delivery on the Tokyo Commodity Exchange fell as much as 1.2 percent to 253.9 yen a kilogram ($2,615 a metric ton), the lowest level since Aug. 8. Futures traded at 254.5 yen at 10:07 a.m. and lost 5.8 percent this week, the worst performance since the five days through May 24.
The yen traded 97.11 per dollar after climbing to the highest level since Aug. 28 yesterday. The first partial U.S. government shutdown in 17 years has delayed three economic data releases this week, including the Labor Department’s monthly jobs report, making it harder for investors to check the health of the world’s largest economy.
“Risk aversion by investors increased, raising demand for the yen as a haven and spurring sales of futures in Tokyo,” said Takaki Shigemoto, an analyst at research company JSC Corp.
The failure of U.S. lawmakers to pass the budget and avert a government shutdown fueled concern they won’t be able to agree on raising the $16.7 trillion debt limit. A U.S. default could have catastrophic consequences that might last decades, the Treasury said in a report yesterday.
Thai rubber free-on-board fell yesterday for a seventh day, losing 0.6 percent to 78.25 baht ($2.51) a kilogram, according to the Rubber Research Institute of Thailand. Markets in China are closed through Oct. 7 for National Day holidays.
Source: Bloomberg
