Rubber drops for second day on Japan data
Thursday, 11 March 2010
TOKYO, March 10 (Bloomberg): Rubber declined for a second day after a drop in Japan's machinery orders eroded investor confidence in the economic recovery, and concern that China may raise interest rates weakened demand.
Futures in Tokyo fell as much as 1.6 per cent, retreating further from a one-week high of 297.9 yen per kilogramme ($3,309 a metric tonne) reached Tuesday. The price advanced to 306 yen on January 15, the highest level since September 2008, amid optimism that the global economic recovery will boost demand.
Japanese machinery orders, an indicator of business investment in three to six months, declined 3.7 per cent in January from December, signaling that any pickup in capital spending is likely to be slow. China's inflation probably accelerated and exports climbed in February, according to surveys of economists, increasing the likelihood of the central bank raising interest rates from a five-year low.
"The market was dragged down by concern about China's monetary tightening," Kazuhiko Saito, chief analyst at Tokyo- based commodity broker Fujitomi Co., said Wednesday by phone. Japan's machinery data also "raised questions about the strength of its economic recovery," he said.
Rubber for August delivery, the most-active contract, lost as much as 4.6 yen to 290.5 yen before trading at 293.4 yen on the Tokyo Commodity Exchange at 11:14 am local time.
China's consumer prices rose 2.5 per cent last month from a year ago, the most in 16 months, according to the median of 29 estimates in a Bloomberg News survey before tomorrow's report. Economists project that the momentum will continue, sending the rate to as high as 4.4 per cent during the year, a separate survey showed last week.
Futures in Tokyo fell as much as 1.6 per cent, retreating further from a one-week high of 297.9 yen per kilogramme ($3,309 a metric tonne) reached Tuesday. The price advanced to 306 yen on January 15, the highest level since September 2008, amid optimism that the global economic recovery will boost demand.
Japanese machinery orders, an indicator of business investment in three to six months, declined 3.7 per cent in January from December, signaling that any pickup in capital spending is likely to be slow. China's inflation probably accelerated and exports climbed in February, according to surveys of economists, increasing the likelihood of the central bank raising interest rates from a five-year low.
"The market was dragged down by concern about China's monetary tightening," Kazuhiko Saito, chief analyst at Tokyo- based commodity broker Fujitomi Co., said Wednesday by phone. Japan's machinery data also "raised questions about the strength of its economic recovery," he said.
Rubber for August delivery, the most-active contract, lost as much as 4.6 yen to 290.5 yen before trading at 293.4 yen on the Tokyo Commodity Exchange at 11:14 am local time.
China's consumer prices rose 2.5 per cent last month from a year ago, the most in 16 months, according to the median of 29 estimates in a Bloomberg News survey before tomorrow's report. Economists project that the momentum will continue, sending the rate to as high as 4.4 per cent during the year, a separate survey showed last week.