TOCOM falls for fourth session, hits 3-week low as yen gains

TOKYO:* Tokyo Commodity Exchange (TOCOM) futures fell to a 3-week low on Tuesday, extending losses into a fourth straight session, as the yen’s rise to a near six-month high versus the dollar prompted fresh selling.

* The benchmark TOCOM rubber contract for new December delivery

finished at 192.4 yen ($1.8) per kg, down 0.5 yen from an opening price of 192.9 yen. It hit the lowest since June 4 of 191.5 yen earlier in the session.

* The most-active rubber contract on the Shanghai futures exchange for September delivery rose 15 yuan to finish at 11,640 yuan ($1,692) per tonne.

* The dollar was last down 0.3% at 106.97 yen, having only fallen below 107 yen per dollar in the January flash crash and then last back in April 2018. A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.

* “Investors have been unwinding their long positions after the backwardation price spread between the near month contract and the far month contract hit the biggest in an about decade,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities

* “Unless there is unexpectedly good news over U.S.-China trade deal from the G20 meeting later this week, the TOCOM is expected to stay in a bearish tone,” he added.

* All eyes are on U.S. President Donald Trump and China’s President Xi Jinping who are due to restart trade talks at the Group of 20 summit in Japan on June 28-29 as investors are desperate for any signs of a thaw in U.S.-China relations.

* Oil fell on Tuesday amid concerns over the outlook for crude demand, but prices were supported after Washington announced new sanctions on Iran amid mounting tensions in the Middle East.

* Japan’s benchmark Nikkei stock average retreated on Tuesday as the combination of the higher yen and brewing U.S.-Iran tensions hit exporters and curbed risk appetite.

* TOCOM’s June contract expired at 233.4 yen per kg on Monday.

* TOCOM’s technically specified rubber (TSR) 20 futures contract for December delivery closed up 0.8 yen at 158.2 yen per kg.

* The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 146.7 U.S. cents per kg, down 0.1%.