TOCOM snaps seven-day rally as yen's surge weighs
TOKYO, May 18 (Reuters) - Benchmark Tokyo rubber futures sank on Thursday, following yen's surge against the dollar and as investors cashed in on a seven-day rally that had boosted prices to a five-week high.
The dollar wallowed near six-month lows against a basket of major currencies on Thursday as the U.S. political crisis appeared to deepen, threatening to delay efforts by President Donald Trump to implement his economic stimulus plans. FRX/ Against the yen, the dollar dropped 2.09 percent on Wednesday, its biggest fall since July 29 last year, and it further slid to a three-week low of 110.53 yen on Thursday.
The Tokyo Commodity Exchange (TOCOM) rubber contract for October delivery JRUc6 0#2JRU: finished down 6.4 yen, or 2.8 percent, at 223.3 yen ($2.01) per kg, dropping from a five-week high hit in the previous session.
"The TOCOM rubber was sold off in the light of yen's jump," said Satoru Yoshida, commodity analyst at Rakuten Securities. A stronger yen makes yen-denominated assets less affordable when purchased inother currencies.
"If the yen keeps rising or China's demand keeps weakening, Tokyo rubber prices is expected to come under stronger pressure," he said.
The most-active rubber contract on the Shanghai futures exchange for September delivery SNRcv1 fell 360 yuan to finish at 13,490 yuan ($1,957) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for June delivery STFc1 last traded at 153.5 U.S. cents per kg, down 2.2 cents.