Rubber futures slumped to a two-month low as concerns grew that Italy’s elections will lead to renewed turmoil in Europe, boosting Japan’s currency as a haven and cutting the appeal of the yen-based contracts.
The contract for August delivery on the Tokyo Commodity Exchange lost 2.9 percent to 289.8 yen a kilogram ($3,162 a metric ton), the lowest settlement for a most-active contract since Dec. 21. Futures have lost 4.2 percent this year.
The yen climbed 0.4 percent to 91.49 per dollar after surging 1.7 percent yesterday, the biggest gain since May 2010. Early results suggested Italy’s election would result in a hung parliament, leading to another vote. Concern that demand may soften in China, the biggest consumer of rubber, contributed to the fall, said Kazuhiko Saito, an analyst at broker Fujitomi Co.
“Investor appetite for futures weakened as the European turmoil boosted the yen as a haven,” Saito said by phone today.
Rubber also declined on concerns demand from China, the biggest consumer, may slow, Saito said. China may tighten monetary policy because of excessive liquidity in the market and rising property prices, China Securities Journal reported today.
The contract for September delivery on the Shanghai Futures Exchange lost 2 percent to close at 24,155 yuan ($3,878) a ton. Thai rubber free-on-board declined 1.6 percent to 89.7 baht ($3.0) a kilogram today, according to the Rubber Research Institute of Thailand.