TOKYO, Sept 15 (Reuters) – Benchmark Tokyo rubber futures fell nearly 4 percent to a 1-week low on Tuesday, slammed by weaker stock prices in China and a stronger yen, but trade was thin as investors awaited the Federal Reserve’s policy decision. The Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery JRUc6 0#2JRU: finished 6.8 yen, or 3.9 percent, lower at 169.6 yen ($1.42) per kg. It earlier fell to as much as 169.3 yen, the lowest since Sept.8.
“Investors’ concerns over slowing economic growth in China were fuelled by slack economic data on Sunday and tumbling Shanghai share prices today,” said Satoru Yoshida, commodity analyst at Rakuten Securities. Growth in China’s investment and factory output missed forecasts in August, pointing to a further cooling in the world’s second-largest economy that will likely prompt the government to roll out more support measures.
China shares extended this week’s losses to roughly 6 percent on Tuesday as investors worried about a slowing economy. Bearish equities also battered rubber prices there.
The most-active rubber contract on the Shanghai Futures Exchange for January delivery SNRcv1 fell 320 yuan to finish at 11,500 yuan ($1,805.76) per tonne. “The TOCOM prices were further weighed on by a higher yen,” Yoshida said.
The yen rose broadly on Tuesday after the Bank of Japan refrained from expanding its stimulus programme, with Governor Haruhiko Kuroda maintaining his optimism about the country’s economic outlook. A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
Markets are looking ahead to the Fed decision on Thursday. The U.S.Federal Reserve, facing its biggest policy decision yet under Chair Janet Yellen, puts its credibility on the line this week regardless of whether it waits or raises interest rates for the first time in nearly a decade.
The front-month rubber contract on Singapore’s SICOM exchange for October delivery STFc1 last traded at 123.3 U.S. cents per kg, down 2.7 cents.
($1 = 119.5400 yen)
($1 = 6.3685 Chinese yuan)
(Reporting by Yuka Obayashi; Editing by Sunil Nair)