Benchmark Tokyo rubber futures dipped on Thursday, giving up most of their gains from this week as investors unwound long positions after Shanghai futures run out of steam, dealers said. The Tokyo Commodity Exchange (TOCOM) rubber contract for June delivery ended down 3.9 yen, or 2.3 percent, at 164.8 yen ($1.37) per kg.
Backed by strong Shanghai prices, the TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, hit a one-week high of 169.9 yen on Tuesday. Japanese markets were shut on Wednesday for the Emperor's birthday. "The TOCOM got a lift earlier in the week from a jump in the Shanghai market on hopes that the Chinese government would come up with some economic measures," said a Tokyo-based dealer who declined to be named.
"But the Shanghai markets looks to have run out of steam now, and that prompted investors in Tokyo to unwind their long positions," he said. The most-active rubber contract on the Shanghai futures exchange for May delivery fell 30 yuan to finish at 10,590 yuan ($1,635.32) per tonne.
"Higher oil prices were supposed to help, but the higher yen weighed the market sentiment. If the yen moves even higher, the TOCOM benchmark may dive below 160 yen," the dealer said. The yen gained against the dollar to 120.32 yen on Thursday. A stronger Japanese currency makes yen-denominated assets expensive for holders of other currencies. US crude prices rose for a fourth session in the lead-up to Christmas as the market tightened on the back of falling supplies and looming exports. The front-month rubber contract on Singapore's SICOM exchange for January delivery last traded at 120.0 US cents per kg, up 1.5 cent.
Comments
Comments are closed.