TOCOM rubber dips for 4th session on stronger yen, Shanghai slump

Benchmark Tokyo rubber futures fell for a fourth session on Tuesday, pressured by the stronger yen and slumping Shanghai futures and as some investors tried to unwind their long positions amid the escalating Greek debt crisis.

The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery finished 6.3 yen, or 2.8 percent, lower at 218 yen ($1.78) per kg after sliding to 216.1 yen, the lowest since May 21.

TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have lost more than 10 percent since hitting a 16-month high of 247.9 yen early this month.

“The stronger yen and a dive in Shanghai rubber prices sent the TOCOM market lower,” said Satoru Yoshida, commodity analyst at Rakuten Securities.

The safe-haven yen was well-bid as investors remained risk-averse. The dollar fell 0.2 percent to 122.31 yen, edging near a five-week low of 122.11 yen hit on Monday.

A stronger yen makes yen-denominated assets more expensive when purchased in other currencies.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 555 yuan, or 4.2 percent, to finish at 12,800 yuan per tonne. It fell to a low of 12,615 yuan, the lowest since April 16.

“TOCOM looks to rebound soon as a 100-day moving average chart suggests prices are near the bottom, but it could also continue its losing streak if the yen gets stronger or Shanghai futures extend losses depending on the outcome of Greek crisis or other factors,” Yoshida said.

The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 151 U.S. cents per kg, down 3.8 cent.