TOKYO (March 27): Benchmark Tokyo rubber futures fell 4% to a near 4-month low on Monday, dragged down by plunging Shanghai futures and a higher yen that makes yen-denominated assets less affordable in other currencies.
The Tokyo Commodity Exchange (TOCOM) rubber contract for August delivery finished 9.9 yen, or 4.0%, lower at 237.5 yen (US$2.15) per kg, after hitting the lowest since Dec 5 of 235.3 yen earlier in the session.
The March contract expired on Monday.
"The TOCOM went down as Shanghai futures lost ground again and the yen got stronger against the sagging dollar," said Satoru Yoshida, a commodity analyst at Rakuten Securities.
The most-active rubber contract on the Shanghai futures exchange for September delivery plunged 860 yuan to finish at 16,150 yuan (US$2,349) per tonne, after diving to below 16,000 yuan for the first time since November.
Against the safe-haven yen, the dollar fell more than one% to around 110.10 — its weakest since Nov 18 — as concerns rose about the prospects of a US public spending boost under President Donald Trump after he failed to push through a healthcare reform bill.
"If Shanghai keeps sliding or the yen keeps climbing, the TOCOM benchmark may be headed lower toward 230 yen," Yoshida said.
The front-month rubber contract on Singapore's SICOM exchange for April delivery last traded at 181.0 US cents per kg, down 8.7 US cents.
(US$1 = 110.2300 yen)
(US$1 = 6.8758 Chinese yuan)