Nov. 27 (Bloomberg) -- Rubber fell for the first time this week as a rally by the Japanese currency weakened the appeal of yen-denominated contracts and crude oil’s slump cut the cost of making rival synthetic products used in tires.
Futures in Tokyo plunged as much as 3.6 percent after three days of gains. The yen advanced to a 14-year high against the dollar on speculation renewed risk aversion will enhance the allure of the Japanese currency as a refuge.
“Investors have been worried that the stronger Japanese currency is making yen-based contracts less attractive,” Rewat Yenchai, an analyst at AGROW Enterprise Ltd., said by phone from Bangkok.
Rubber for May delivery, the most-active contract, fell as much as 9.1 yen to 244 yen per kilogram ($2,838 a metric ton) on the Tokyo Commodity Exchange before trading at 245.8 yen by 10.50 a.m. local time.
Futures also declined after crude oil fell on concern that the pace of fuel demand recovery in the U.S., the biggest energy-consuming nation, may stall.
Crude oil for January delivery dropped $1.87, or 2.4 percent, to $76.09 a barrel on the New York Mercantile Exchange at 10.32 a.m. Tokyo time. Futures, which have gained 71 percent this year, are poised for a 0.6 percent decline for the week.
Rubber for March delivery on the Shanghai Futures Exchange slumped 1.9 percent to 21,740 yuan ($3,184) a ton at 10.55 a.m. Tokyo time.
Editors: Richard Dobson, Wendy Pugh.
To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net
