Rubber Declines as Yen’s Rebound Cuts Appeal Amid Cyprus ConcernAya Takada
Rubber fell as Japan’s currency gained, cutting the appeal of yen-denominated contracts, amid concern Cyprus’s bank-restructuring plan will be a template for other European nations, imperiling bondholders and depositors.
The contract for delivery in August lost 1.2 percent to end at 276.1 yen a kilogram ($2,930 a metric ton) on the Tokyo Commodity Exchange, extending this year’s retreat to 8.7 percent.
The yen traded at 94.22 per dollar after climbing yesterday to 93.53, the highest level since March 6. Investor demand for the currency as a haven increased amid concern the restructuring plan for Cyprus will set a precedent for losses on deposits in other European countries.
“The market retreated as concerns grew that the Cyprus bailout agreement would impact on other European nations,” Hideshi Matsunaga, an analyst at broker ACE Koeki Co. in Tokyo, said today by phone.
The island nation’s rescue sets precedents for the euro zone that may stick in the memory of depositors and bondholders alike as investors debate who will next fall victim to the debt crisis. Under the terms of the agreement struck yesterday in Brussels, senior Cypriot bank bond holders will take losses and uninsured depositors will be largely wiped out.
Synthetic rubber demand growth in China, the world’s biggest buyer, will exceed that of natural rubber, Shen Jinrong, chairman of Hangzhou Zhongce Rubber Co., China’s largest tire maker, said today. China’s natural rubber consumption in 2013 is forecast to rise 7 percent to 3.7 million tons, Deng Yali, chairman of China Rubber Industry Association, said today.
The contract for September delivery on the Shanghai Futures Exchange fell 0.7 percent to close at 22,760 yuan ($3,664) a ton. Thai rubber free-on-board was unchanged at 86.50 baht ($2.95) a kilogram today, the Rubber Research Institute of Thailand said on its website.