Benchmark TOCOM rubber futures fell early on Monday (Mar 3) as a stronger yen and statistics showing signs of a slowdown in the economy of top rubber buyer China sapped sentiment for the soft commodity.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for August delivery was down 2.4 yen at 222.6 yen per kg by 0015 GMT, after finishing 6.8 yen higher on Friday (Feb 28).
Activity in China’s factory sector slowed to an 8-month low in February, a government survey showed on Saturday (Mar 1), reinforcing signs of a modest slowdown in the economy as demand weakens.
Japanese companies raised spending on plant and equipment by 4.0 percent in October- December from a year earlier, finance ministry data showed on Monday (Mar 3), posting a second year-on-year gain and indicating a gradual pickup in business expenditures on the back of improved earnings.
Ukraine mobilised for war on Sunday and Washington threatened to isolate Russia economically, after President Vladimir Putin declared he had the right to invade his neighbour in Moscow’s biggest confrontation with the West since the Cold War.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 2.0 percent week-on-week, the bourse said on Friday (Feb 28).
MARKET NEWS
The U.S. dollar was quoted around 101.35 yen early on Monday (Mar 3), slightly above a one-month low high earlier, as tensions in Ukraine led anxious investors to cut their exposure to riskier assets in favour of traditional safe haven bets like the Japanese currency.
Japan’s benchmark Nikkei stock average fell 1.7 percent in Monday (Mar 3) trade, as concerns about Russia’s aggression in the Ukraine weighed on sentiment.
The 19-commodity Thomson Reuters/CoreCommodity CRB index rose 7 percent for the month of February after arabica coffee rallied on fears of crop damage from Brazil’s drought and lean hogs jumped on concerns of tighter supply.
Reuters
