RUBBER-TOCOM climbs on weaker yen; investors keep an eye on U.S.-China tensions

04:03' PM - Thursday, 21/05/2020

* Tokyo Commodity Exchange (TOCOM) futures climbed on Friday helped by a weaker yen against the U.S. dollar, but many investors stayed on the sidelines amid growing tensions between top rubber buyer China and the United States.

* TOCOM’s rubber contract for October delivery finished 1.9 yen higher at 153.0 yen ($1.43) per kg. For the week, it eked out a 0.2% gain, marking a second straight weekly gain.

* The most-active rubber contract on the Shanghai futures exchange for September delivery rose 135 yuan to finish at 10,295 yuan ($1,450) per tonne.

* “The yen’s drop lent support to the TOCOM although the market remained without any clear direction,” said Jiong Gu, an analyst at Yutaka Shoji Co.

* The U.S. dollar was quoted around 107.06 yen on Friday, compared with 106.81 yen in late Asia trade the previous day. A lower yen makes yen-denominated assets more affordable when purchased in other currencies.

* Japan’s benchmark Nikkei stock average rebounded after three straight sessions of losses, helping boost investors’ risk appetite for commodities including rubber.

* However, investors were worried about a souring U.S.-China relation as U.S. President Donald Trump said he has no interest in speaking to President Xi Jinping right now and went so far as to suggest he could even cut ties with the world’s second-largest economy.

* “Investors will be focusing on any development in the U.S.-China relations next week as further deteriorations may stall economic recovery in the two countries,” Yutaka’s Gu said.

* The front-month rubber contract on Singapore’s SICOM exchange for June delivery last traded at 109.2 U.S. cents per kg, up 1.1%.

* Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.1% from last Friday, the exchange said on Friday.


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