TOCOM rubber falls in thin trade, weaker yen caps losses

Benchmark Tokyo rubber futures fell in lacklustre trade on Monday, weighed down by weaker Shanghai futures in early afternoon, but losses were capped as the dollar was firm near a two-month high against the yen, dealers said.

The Tokyo Commodity Exchange (TOCOM) rubber contract for October delivery finished 1.6 yen, or 0.7 percent, lower at 217.6 yen ($1.79) per kg, after recovering from an intra-day low of 216.5 yen.

The contract for May delivery expired on Monday at 209.3 yen per kg.

“The market was quiet as the expiry of the May contract went with no surprise,” said Hiroyuki Kikukawa, general manager at Nihon Unicom Inc.

“Behind the loss in TOCOM was weaker Shanghai futures in early afternoon, but a softer yen limited losses,” he said.

The most-active rubber contract on the Shanghai Futures Exchange for September delivery fell to as low as 13,645 yuan ($2,200.45) per tonne in early afternoon, but recovered later to close at 13,955 yen, up 60 yuan.

Against the yen, the dollar traded near a two-month high of 121.78, jumping from a low of 120.64 on Friday, helped by a rise in U.S. Treasury yields. A move above 122.04 would take it to an eight-year peak against the yen.

“TOCOM futures have performed better than Shanghai recently due in part to the weaker yen. The currency move may become a focus for TOCOM prices this week,” Kikukawa said.

The front-month rubber contract on Singapore’s SICOM exchange for June delivery last traded at 155.3 U.S. cents per kg, down 0.7 cent.