By Supunnabul Suwannakij
Aug. 4 (Bloomberg) -- Rubber retreated from a five-week high as weaker-than-expected U.S. economic data and a decline in crude oil prices raised concern that demand for the commodity used to make tires may decline.
Futures in Tokyo fell as much as 1.9 percent after reaching 285.9 yen per kilogram ($3,343) yesterday, the highest level since June 28. Crude oil declined from a three-month high of more than $82 a barrel in New York amid concern that the economic recovery may weaken.
U.S. pending home sales unexpectedly dropped for a second month in June, figures from the National Association of Realtors showed yesterday. Consumer spending in June was unchanged from the previous month as employment growth stagnated, and factory orders fell more than twice as much as economists estimated, other reports showed.
“Weaker-than-expected U.S. economic data pressured market sentiment, sparking concern demand for rubber may slow,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co. “The strengthening of the Japanese currency to an eight-month high also cut appetite for yen-based contracts.”
January-delivery rubber dropped as much as 5.3 yen to 276.6 yen per kilogram before settling at 278.6 yen. January-delivery rubber on the Shanghai Futures Exchange gained 2.2 percent to close at 24,890 yuan ($3,675) a ton.
“The market reacted to the stronger yen and lower oil prices,” said Felix Yeo, trading manager at the Singapore unit of Marubeni Corp.
The yen strengthened against the dollar on speculation the Federal Reserve will introduce additional credit-easing measures to revive the economy, diminishing the appeal of U.S. assets.
The dollar dropped to 85.33 yen in Tokyo from 86.79 in New York yesterday, after falling to 85.61, the lowest level since Nov. 27.
The Thai benchmark price remained unchanged today at 104.40 baht ($3.24) a kilogram, the Rubber Research Institute of Thailand said on its website today.
(bloomberg.com)
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