Rubber Tumbles as Yen Rebounds, U.S. Data Raise Demand Concerns

Rubber declined to a seven-week low as the Japanese currency traded near a one-month high against the dollar, cutting the appeal of yen-based futures, and after U.S. jobs and factory data missed estimates.

The contract for delivery in November on the Tokyo Commodity Exchange fell 3.6 percent to end at 247.7 yen a kilogram ($2,495 a metric ton), the lowest level at close since April 18. Futures extended losses for this year to 18 percent.

The yen climbed to 98.86 per dollar, the highest level since May 9. Companies in the U.S. hired fewer workers than projected last month, the ADP Research Institute reported yesterday, while separate data showed growth in service industries and factory orders.

“Risk-aversion by investors increased demand for the yen as a haven, which is negative for futures in Tokyo,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone. Futures were also weighed down by concerns about slowing growth in China, the world’s largest consumer, he said.

China’s outbound shipments may have grown 7.1 percent in May from a year earlier, less than half the previous month’s reported 14.7 percent, based on the median estimate of 34 economists ahead of data due June 8. Import growth probably slowed to 6.9 percent from April’s 16.8 percent, a Bloomberg News survey showed.

Senior officials from Thailand, Indonesia, Malaysia will meet next week to discuss measures to limit supply and reduce price volatility, said Suwit Chaikiattiyos, deputy director-general at Department of Agriculture, who is a Thai representative in International Tripartite Rubber Council.

Thai rubber free-on-board dropped 0.3 percent to 87.90 baht ($2.87) a kilogram today, the lowest level since May 3, according to the Rubber Research Institute of Thailand. Rubber for delivery in September on the Shanghai Futures Exchange fell 3.1 percent to close at 18,240 yuan ($2,974) a ton.

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