Tokyo futures fall on euro zone uncertainty

Tokyo futures fall on euro zone uncertainty
May 18, 2012


TOKYO, May 18 (Reuters) - Tokyo rubber futures fell 1.4 percent on Friday, under pressure from a strong yen and concerns that the euro zone political and economic crisis will sap demand, and posted a 4.8 percent decline on the week.

Investors continued to avoid riskier assets on fears that Greece would leave the euro and after financial instability increased in Spain after a downgrade of 16 Spanish banks by Moody’s on Thursday.

The benchmark rubber contract on the Tokyo Commodity Exchange for October delivery settled Friday at 269.9 yen per kg, down 3.7 yen or 1.4 percent from the previous close.

“The TOCOM market will have limited room in the upside unless some stability is back to Greece, the core of the market’s current concerns,” said a trader at a Japanese commodity brokerage.

The trader said he expects a price range of between 263 and 275 yen for next week unless there is any change in fundamental factors.

The key October contract earlier this week touched a low of 261.5 yen, the lowest since Jan. 5.

But it stopped falling at 266.1 yen on Friday as bargain hunting emerged on expectations the Thai government would eventually intervene to support prices, traders said.

Thailand began to fully implement an intervention scheme in mid-May, aiming to push the price of unsmoked sheet, which farmers to sell factories, to 120 baht per kg.

The most-active rubber contract on the Shanghai rubber exchange for September delivery closed down 355 yuan at 24,090 yuan per tonne.

The front-month June rubber contract on Singapore’s SICOM exchange was last traded unchanged at 331.40 U.S. cents per kg.