TOKYO (June 29): Benchmark Tokyo rubber futures inched lower on Wednesday, giving up gains made earlier in the session, as investors took profits after the yen moved higher amid nerves over the implications of Britain’s vote to leave the European Union.
Even as the risk-averse mood eased slightly and regional equities gained, lessening the appeal of the perceived safe-haven yen, the dollar shed 0.4% to 102.34 yen. A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
The Tokyo Commodity Exchange rubber contract for December delivery <0#2JRU:> ended down 0.5 yen, or 0.3%, at 153 yen (US$1.49) per kg, after rising as high as 155.1 yen.
“There is still heavy uncertainty over the implications of Brexit. Investors don’t want to take large positions under such circumstances,” said Satoru Yoshida, commodity analyst at Rakuten Securities.
On the positive side, crude rubber inventories at Japanese ports fell 3.9% to 11,786 tonnes by June 10 from the prior inventory date, data from the Rubber Trade Association of Japan showed on Wednesday.
Oil rose on Wednesday as financial traders poured money back into commodities following the initial shock of Britain’s vote to leave the EU, and as a potential strike in Norway and crisis in Venezuela threatened to cut supply.
“Still, unless it gets clear that no other EU countries will follow Britain’s step, investors won’t become real bullish on commodities such as oil and rubber,” Yoshida said.
The most-active rubber contract on the Shanghai Futures Exchange for September delivery fell 15 yuan to finish at 11,250 yuan ($1,691.81) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 134.0 US cents per kg, down 0.4 cent.
($1 = 102.3900 yen)
($1 = 6.6497 Chinese yuan)