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TOKYO (Sept 4): Benchmark Tokyo rubber futures closed at its lowest in more than six years, falling for a fifth straight session on Friday after lower oil prices and the dollar’s tumble against the yen dragged, while concern over ample supplies continued to weigh.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, were mostly quiet during the day, with Chinese markets closed for a second day for a holiday.
The dollar sank against the yen on Friday to around 119.42 as the safe-haven Japanese currency gathered bids after Tokyo shares fell to a seven-month low. Oil prices eased ahead of U.S. jobs data that is expected to play into the Federal Reserve’s decision on the timing of any U.S. rate hike.
The Tokyo Commodity Exchange rubber contract for February delivery closed 2.9 yen lower or 1.7% at 164.1 yen per kg, its lowest closing since July 15, 2009. It touched an intraday low of 163.3 yen per kg, the lowest since July 16, 2009.
For the week, the benchmark contract posted an 8% decline, a third straight weekly fall.
“Thai physical prices have fallen, reflecting TOCOM drop but there’s a constant stream of products from producers,” said a source with a Tokyo-based broker. “I hear that a tyre maker in Japan offered deep discounts to customers, indicating a slowdown in demand.”
The source added that the rubber market could come under further pressure next week when Shanghai futures reopen.
The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 120.2 U.S. cents per kg, down 2 cents.
Source: Reuters