Tokyo rubber futures fell 2.7 percent to a one-week low on Monday on heavy stop-loss selling triggered by a stronger yen which pushed prices below the key support level of 350 yen. The benchmark December rubber contract on the Tokyo Commodity Exchange fell 9.4 yen, or 2.7 percent, to settle at 345.7 yen ($3.28) per kg.
The benchmark fell as low as 341.2 yen, the lowest since June 23. Dealers said TOCOM rubber was still supported by soaring oil prices, which neared $143 a barrel on Monday. "Funds and day traders sold heavily when the price broke below 350 yen, pushing prices below 345 yen every quickly," a Japanese dealer said. The dollar extended broad losses on Monday, hitting a three-week low versus the yen, due to weakness in stock markets that heightened the appeal of low-yielding currencies.
A stronger yen makes dollar-based rubber cheaper and usually encourage players to sell TOCOM contracts in a bid to stop losses. US crude oil prices rose more than $1 to above $142 a barrel on Monday, bolstered by a weak US dollar and continuing tensions between Israel and Iran over Tehran's nuclear programme.
Physical rubber prices were expected to remain firm this week as heavy rain affected producing countries, traders said. Physical trade remained thin with a few major tyremakers buying Indonesia SIR20 at $1.47 -$1.48 per kg.
Comments
Comments are closed.