Tokyo rubber futures tumbled for the fourth consecutive day on Friday as a firm yen and a broad decline in commodities spurred selling. Gold futures on the Tokyo Commodity Exchange fell by the daily 60-yen limit, with the exception of the prompt contract, which has no constraints.
The benchmark TOCOM rubber contract for August delivery was trading down 2.5 yen or 0.9 percent at 268.0 yen per kg, versus on Thursday's close of 270.5 yen when it fell by 6.6 yen.
It was off the day's trough so far of 265.3 yen. TOCOM rubber has been under pressure this week due to the rise in the value of the yen against the dollar. The lead contract fell by the 10-yen daily limit on Wednesday. A stronger yen makes dollar-based commodities, such as rubber, cheaper for Japanese investors, encouraging them to sell yen-based TOCOM futures to stop further losses. The yen edged up on Friday on a firm reading in Japanese household spending in January, although it gave up gains shortly afterwards.
The dollar briefly slipped to around 117.45 yen. Firm fundamentals due to the annual wintering season at top rubber producer Thailand, when latex output falls often causing supply tightness, has provided support.
Elsewhere, crude rubber stocks held at warehouses in Japan, a large consumer, amounted to 19,504 tonnes as of February 20, up 5.5 percent from 18,494 tonnes on February 10 when the previous data was taken, the Rubber Trade Association of Japan said on Thursday. Japanese inventories have been climbing steadily since the start of the year, and are currently up about 36 percent from 14,338 tonnes at the end of December.
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