Currency volatility casts gloom over Asian rubber market<\/p>\n
SINGAPORE (Reuters): Political upheaval in Japan and regional
\ncurrency volatility would cast a gloomy cloud over Southeast
\nAsia's lackluster rubber market this week, regional traders said
\nyesterday.<\/p>\n
\"Japan's political problems and falling regional currencies
\nremain the focus of the market and will keep rubber prices under
\ndownward pressure,\" one Singapore-based trader said.<\/p>\n
The three-way race for the prime minister's office in Tokyo
\nstarted after Ryutaro Hashimoto's resignation last week and will
\nlast until Friday, with many in the market backing former chief
\ncabinet secretary Seiroku Kajiyama.<\/p>\n
\"I think Kajiyama could bring some confidence back to the
\nAsian markets,\" another Singapore trader said.<\/p>\n
A national holiday in Japan got the Asian rubber market off to
\na quiet start, following the lead of the currency markets.<\/p>\n
The Japanese yen was trading at about 139 to the U.S. dollar
\nat 0845 GMT, with most regional currencies losing ground to the
\ngreenback, though mainly in dribs and drabs.<\/p>\n
Currency volatility would be the main factor dampening
\nMalaysian rubber prices, dealers said.<\/p>\n
Last week, demand from Taiwan and South Korea was offset by
\nthe ringgit's strength against the U.S. dollar and in the absence
\nof fresh factors, currencies would continue to exert influence on
\ntraders.<\/p>\n
\"Prices could ease back as the ringgit has been holding
\nsteady,\" a local trader said. \"But it will be rangebound.\"<\/p>\n
At the close of last week, the Malaysian Rubber Board quoted
\nAugust RSS1 buyer at 292.50 Malaysian cents a kg after hitting a
\nhigh of 295, compared with 289.50 a week earlier.<\/p>\n
August SMR20 buyer closed at 254 cents a kg, down three cents
\nfor the week.<\/p>\n
Indonesian traders meanwhile were keeping a close watch on the
\nrupiah, which would keep them sidelined.<\/p>\n
\"The situation is not expected to change much this week. The
\nprices will remain at about 27-28 U.S. cents\/lb fob Palembang
\nbecause the traders and buyers are still looking at the political
\nand economic situation which has yet to stabilize,\" said one
\nIndonesian trader.<\/p>\n
Negative influence on rubber prices was also seen from
\nindustrial disputes in the U.S. and South Korea.<\/p>\n
Hyundai Motor Co has begun a program of lay-offs, sending
\nnotices to some 2,700 workers, while General Motors Corp faces a
\nstrike at a small-car plant which follows stoppages earlier this
\nyear at two other GM plants.<\/p>\n
\"These strikes unsettle the market and remove any demand at
\nall for fill-in rubber volume which was weak anyway,\" a Singapore
\ntrader said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/currency-volatility-casts-gloom-over-asian-rubber-market-1447893297",
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