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Rubber declined for the first time in four days, falling from a three-month high, as the Japanese currency strengthened and higher-than-expected U.S. jobless claims raised concerns that demand may weaken.
January-delivery rubber retreated as much as 1.4 percent to 289.7 yen a kilogram ($3,389 a metric ton) on the Tokyo Commodity Exchange, before settling at 291.1 yen. The contract had its first weekly gain since Aug. 6, climbing 3.7 percent.
“The market was pessimistic as U.S. economic data wasn’t so good and stock markets were down,” said Yasuhisa Sugimoto, manager for global marketing at Okato Shoji. “Investors were concerned that a global economic slowdown may affect rubber demand from China,” he said by phone from Tokyo.
The yen headed for a weekly gain versus 15 of its 16 major peers after U.S. reports yesterday showed jobless claims increased to the highest level since November and an index of Philadelphia-area manufacturing fell. The Japanese currency rose to 85.19 a dollar, from 85.39 yesterday.
Reports yesterday showed that claims for U.S. jobless benefits jumped to the highest level since November and Philadelphia-region manufacturing shrank for the first time in a year, adding to signs that the biggest economy may be slowing more than forecast.
Weaker Demand
“A series of bearish economic data from the U.S. raised concerns that a global economic slowdown will take place in the second half of this year and next year, weakening demand,” said Chaiwat Muenmee, an analyst at Bangkok-based DS Futures Co.
January-delivery rubber in Shanghai slumped 2.1 percent to close at 25,270 yuan ($3,723) a ton, still gaining for a fifth straight week.
“The market downside will be cushioned by limited supply as rainfall continues in southern Thailand,” Chaiwat said.
Heavy rain is expected across Thailand, the largest producer, this week and next, according to the Thai Meteorological Department. In Indonesia, rains are forecast in Sumatra, Kalimantan and parts of Sulawesi and Java this month and next, the Climatology and Geophysics Agency said on Aug. 11.
Cash prices in Thailand were unchanged today at 105.5 baht ($3.35) per kilogram, according to the Rubber Research Institute of Thailand. Supply remained limited as rainfalls take place in many rubber plantation areas, it said on its website today.
Source: Bloomberg