Rubber Declines for Second Day on Stronger Yen, Syria TensionsSupunnabul Suwannakij
Rubber fell for a second day as Japan’s currency maintained its biggest gain in two months amid concern that the U.S. will take military action against Syria.
Rubber for delivery in January on Tokyo Commodity Exchange retreated 1.3 percent to settle at 272 yen a kilogram ($2,790 a metric ton). The contract for delivery in February, which started trading today, ended at 274.1 yen.
The yen traded at 97.42 per dollar after climbing 1.5 percent yesterday. Asian stocks fell a second day as President Barack Obama works with allies including the U.K. and France to reach agreement on limited action against Syria after concluding the regime used chemical weapons on civilians. The stronger Japanese currency reduces the appeal of yen-based contracts.
“It’s risk-off mode amid concerns of possible U.S. military action on Syria,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo. “The stronger yen also hurt rubber.”
China, the biggest buyer, will complete a plan to buy as much as 200,000 tons for government stockpiles, the Securities Times reported today, without saying where it got the information.
Thailand, the largest producer, plans to spend 30 billion baht to support the industry, boost prices and reduce supply, Deputy Prime Minister Kittiratt Na-Ranong said today. The government has no plan to sell rubber in state inventories and will encourage farmers to cut down aging trees, he added.
About 450 protesters blocked a road and rail line in Nakhon Si Thammarat province yesterday, demanding the government buy rubber at above-market rates.
Rubber for delivery in January fell 2.6 percent to close at 20,155 yuan ($3,292) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board gained 0.6 percent to 84.95 baht ($2.63) a kilogram today, according to the Rubber Research Institute of Thailand.