TOCOM edges lower on stronger yen, posts second weekly loss

Tokyo Commodity Exchange (TOCOM) futures edged lower on Friday and posted a second straight weekly loss, weighed down by a stronger yen against the US dollar.

* The benchmark TOCOM rubber contract for November delivery  finished 0.7 yen lower at 199.8 yen ($1.86) per kg. For the week, it booked a 1.1% drop.

* The dollar traded at 107.52 yen in Friday afternoon in Asian trade but at one point fell to a five-month low of 107.04 as Fed Chairman Jerome Powell’s signal that the central bank will cut rates at its next policy meeting in July continued to weigh on the dollar.

* “Stronger yen as well as technical selling were behind the fall,” said Satoru Yoshida, a commodity analyst with Rakuten Securities. A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.

* “But the TOCOM may recover next week if positive news on US-China trade talks come ahead of the G20 meeting in Osaka due next weekend,” he said.

* Financial markets are focused on whether US President Donald Trump and his Chinese counterpart Xi Jinping can narrow their differences when they sit down at the G20 summit on June 28-29.

* The most-active rubber contract on the Shanghai futures exchange for September delivery fell 10 yuan to finish at 11,735 yuan ($1,707) per tonne.

* Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.6% from last Friday, the exchange said on Friday.

* Oil prices rallied towards $65 per barrel on fears of a US military attack on Iran that would disrupt flows from the Middle East, which provides more than 20% of the world’s oil output.

* Japan’s benchmark Nikkei stock average dropped on Friday as investors awaited cues from US-China trade talks, while oil and mining shares were in demand amid rising geopolitical risks in the Middle East.

* TOCOM’s technically specified rubber (TSR) 20 futures contract for December delivery closed down 1.1 yen at 159.5 yen per kg

* The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 147.9 US cents per kg, down 0.3%.