TOKYO (Aug 13): Benchmark TOCOM rubber futures steadied on Thursday as investors tried to clear their positions amid uncertainties over China’s currency policy after its central bank said there was no basis for further depreciation in the yuan.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery <0#2JRU:> finished 0.2 yen higher at 194.3 yen ($1.56) per kg.
“Investors and traders were confused and hesitant to take fresh positions as they were not sure what China really wanted and how its devalution of the yuan this week would impact its economy,” a Tokyo-based dealer said.
The People’s Bank of China (PBOC) said there was no basis for more yuan depreciation in the light of strong economic fundamentals, even though the yuan dropped for the third straight day.
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Also, China’s central bank has stepped up intervention in yuan trading, ordering state banks to buy yuan at designated rates on behalf of the monetary authorities, among other emergency measures, banking sources with direct knowledge of the matter told Reuters on Thursday.
Trade on TOCOM was thin as many investors were away for Japan’s “Obon” holiday with many companies closed for much of the week.
“With many market participants away for holiday, most of the trades were position adjustments,” the dealer said.
“Rubber prices are expected to stay under pressure as China’s measures to boost its exports may not help shore up domestic demand,” he said.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 350 yuan to end at 12,490 yuan ($1,952.11) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 134.5 U.S. cents per kg, down 0.1 cent.
($1 = 124.5500 yen)
($1 = 6.3982 Chinese yuan)
