Tokyo Futures Fall For 3rd Session In Row On Demand Concerns

Key TOCOM rubber futures on Wednesday (Apr 27) fell 2.9 percent to a five-week low as concerns over weak demand from Japan's auto industry and a stronger yen weighed on the market.
The key Tokyo Commodity Exchange rubber contract for October delivery settled down 11.3 yen at 378.6 yen per kg, falling for a third session in a row.
The contract fell as much as 3.1 percent to 378 yen per kg before the close as weakness in Shanghai rubber futures weighed on sentiment.
The most active rubber contract on the Shanghai Commodity Exchange for September delivery slid 2.2 percent, or 740 yuan, to close at 32,160 yuan per tonne. Volume stood at 948,158 lots.
"Market sentiment is weak as it looks likely that Japan's carmakers will not get back to normal operations until the end of this year," said Hiroyuki Kikukawa, a general manager at trading company Nihon Unicom Inc in Tokyo.
"Investors are now a lot more cautious, apparently as a reaction to the strong gains of late last year."
Japan's major carmakers announced big production cuts after a March 11 earthquake and subsequent tsunami savaged the sector's parts supply chains.
French carmaker Renault said on Wednesday (Apr 27) the impact of the Japan earthquake and tsunami on the auto industry supply chain could lead to slower production in the coming months.
Global 2011 auto industry production growth will now be below 6 percent because of the Japan disaster, finance chief Dominique Thormann told a conference call, adding that he would have raised that forecast had it not been for the earthquake.
Standard and Poor's threatened to cut Japan's sovereign credit rating again, warning the huge cost of last month's quake will hurt already weak public finances unless bickering politicians can agree to raise taxes.
The dollar fell broadly on Wednesday (Apr 27), marking a fresh nadir against the Swiss franc and a 29-year trough against the Australian dollar as investors expect no surprises from the U.S. Federal Reserve's policy meeting later in the day while the Japanese yen was dented after Standard and Poor's cut its rating outlook on Japan.
Crude futures fell on Wednesday (Apr 27) as investors waited for details of the U.S. Federal Reserve's assessment of the economy and its monetary policy stance, while a weak dollar provided support.
Japan's Nikkei closed up 1.4 percent on Wednesday (Apr 27), posting its strongest percentage gain in a week, with investors relieved that many of the first major earnings reports and guidance after the last month's quake did not yield any nasty surprises.
A fresh batch of corporate results pushed U.S. stocks to their best levels since June 2008 on Tuesday (Apr 26), renewing optimism that profit growth will remain resilient enough to keep equities on the rise.
(Reuters, April 27, 2011)