Benchmark Tokyo rubber futures fell on Thursday as investors took profits after three days of gains and on concerns about the impact of a slowing Chinese economy, dealers said. The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for October delivery dropped 1.1 yen, or 0.5 percent, to settle at 205.0 yen ($2.01) per kg.
The contract earlier rose to 208 yen, the highest since April 30, recovering after settling at 198.3 yen on Friday, but lost steam after failing to break through to 209 yen, the intra-day high hit two weeks earlier. "It tried 209 yen in the morning, but selling pressure kicked in as soon as investors saw it was not going above the 209 yen level," said Jiong Gu, an analyst at Yutaka Shoji Co.
Japan's economy clocked its fastest pace of growth in more than two years in the first quarter as consumer spending jumped and business investment turned surprisingly strong in a sign of confidence in the prospects for future growth. "I think the benchmark will try 209 yen soon as Japan's GDP came above market consensus and an overall impact from a sales tax hike in April seemed to be limited," Gu said.
Crude rubber inventories at Japanese ports stood at 21,880 tonnes as of May 10, up 0.05 percent from 10 days earlier, data from the Rubber Trade Association of Japan showed on Thursday. China might miss its economic growth target for the first time in 15 years as data points to a sharper-than-expected loss of momentum and top leaders are talking about a "new normal" of slower growth.
The most-active rubber contract on the Shanghai futures exchange for September delivery lost 165 yuan to finish at 14,100 yuan ($2,300) per tonne. The front-month rubber contract on Singapore's SICOM exchange for June delivery last traded at 168.50 US cents per kg, down 2.00 cents.
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