TOKYO (Aug 18): Benchmark Tokyo rubber futures slid to a 1-week low on Thursday on fresh selling as the yen gained against the US dollar, although losses were capped by firm oil prices, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery <0#2JRU:> finished 3.2 yen, or 2.0%, lower at 155.2 yen (US$1.55) per kg, after dipping to 154.8 yen, the lowest since Aug. 12.
“A higher yen weighed on market sentiment, but the benchmark still stayed within a range of 150-160 yen, supported in part by stronger oil prices,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
The dollar shed 0.4% to 99.85 yen, not far from a seven-week low of 99.55 hit on Tuesday, after minutes from the Federal Reserve’s July meeting showed policymakers were divided on raising interest rates in the near term.
A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
Oil prices rose on Thursday, with Brent topping US$50 a barrel for the first time in six weeks, as traders continued to talk up the potential for an output cut agreement at a meeting of OPEC and non-OPEC producers next month.
TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have been stuck in a narrow trading range over the past few months.
“I expect the market will remain in the same tight range at least until the expiration of the near-term contract next week,” Kikukawa added.
The August delivery will expire next Thursday.
The most-active rubber contract on the Shanghai Futures Exchange for January delivery fell 160 yuan to finish at 12,975 yuan (US$1,957.13) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 131.0 US cents per kg, down 1.6 cent.
(US$1 = 100.1200 yen)
(US$1 = 6.6296 Chinese yuan)
