Rubber was poised for a second weekly decline amid concern that Europe’s debt crisis is worsening and as the Japanese currency strengthened, reducing the appeal of yen-based contracts.
The contract for delivery in August lost as much as 2.5 percent to 275.1 yen a kilogram ($2,900 a metric ton) on the Tokyo Commodity Exchange and was at 277.5 yen at 11:24 a.m. Futures fell 1.8 percent this week and 8.3 percent this year.
The European Central Bank gave Cyprus until the start of next week to agree to a bailout package or lose emergency funding. The yen strengthened this week against 14 of its 16 major counterparts, trading at 94.88 per dollar, on speculation stimulus efforts by new Bank of Japan leadership will fall short of investor expectations.
“The strengthening yen and Cyprus news pushed down commodity prices including rubber,” said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co. (8747)
Rubber is poised to enter a bear market in the next month as a dead-cross formation signals a further sell-off, according to Trading Central SA. Support was forecast at 242 yen, a level last seen in November, said Ludwig Garric, a technical analyst at the Paris-based company.
The contract for September delivery on the Shanghai Futures Exchange dropped 0.4 percent to 22,805 yuan ($3,671) a ton. Thai rubber free-on-board rose 1.2 percent to 86.60 baht ($2.97) a kilogram yesterday, the Rubber Research Institute of Thailand said on its website.
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