By Aya Takada
May 14 (Bloomberg) -- Rubber tumbled, erasing this week’s gains, as a decline in crude oil and a rally in Japan’s currency made yen-based contracts less attractive to investors.
Futures in Tokyo lost as much as 3.3 percent, extending losses this month to 10 percent amid concern that the sovereign debt crisis that began in Greece may be replicated in other European countries.
Oil dropped for a fourth day and the U.S. currency climbed against the euro after Portugal announced austerity measures, spurring concern that fiscal tightening across Europe will limit economic growth. The yen advanced yesterday as investors sought the safety of the currency.
“The risk appetite of investors is low as concerns about Europe’s debt problems persist,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. “The market will remain capped for a while.”
Rubber for October delivery, the most-active contract, lost as much as 8.8 yen to 260.6 yen per kilogram ($2,810 a metric ton) before trading at 262.7 yen on the Tokyo Commodity Exchange at 1:19 p.m. local time.
Crude oil for June delivery dropped 0.8 percent to $73.83 a barrel on the New York Mercantile Exchange, cutting the cost of making rival synthetic rubber.
The yen traded at 92.76 per dollar at 12:49 p.m. Tokyo time after gaining 0.5 percent to 92.75 yesterday.
Rubber futures reached a 21-month high of 338.5 yen on April 16 on rising demand and as supply from Thailand, the world’s largest exporter, entered a seasonal decline. Prices then retreated as growers in Thailand’s main producing area resumed tapping rubber trees, Sugata said. Rubber trees shed leaves and reduce latex output during February to April, a period known as wintering.
September-delivery rubber on the Shanghai Futures Exchange fell 2.1 percent to 21,870 yuan ($3,204) a ton at the 11:30 a.m. local-time break.
(bloomberg.com)
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