Markets

Tokyo futures fall on global economic, debt worries

TOKYO : Key Tokyo rubber futures fell nearly two percent on Monday, as sentiment turned bearish on a drop in oil price

Published September 12, 2011 Updated September 12, 2011 11:39am

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By Imad Uddin

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FUNDAMENTALS

The benchmark rubber contract on the Tokyo Commodity Exchange for February delivery dropped 6.5 yen, or 1.8 percent, to 362.1 yen per kg.

The most active Shanghai rubber contract for January was up 330 yuan to finish at 34,095 yuan ($5,340) per tonne on Friday. Volume stood at 668,824 lots.

Chinese financial markets are closed on Monday for a holiday, reopening on Tuesday.

The euro got off to a rocky start in Asia on Monday, falling to fresh six-month lows against the greenback and a 10-year trough on the yen as downside momentum picked up pace after several key technical levels gave way recently.

Oil declined by about $1 on Monday with a stronger dollar, as investors shunned commodity risk because of Europe's deepening sovereign debt crisis, while economic gloom dampened the outlook for energy use.

MARKET NEWS

Big Japanese manufacturers turned optimistic about business conditions in the three months to September compared with the previous quarter, a survey showed on Monday, as a rapid recovery in supply chains and output following the March 11 natural disaster lifted sentiment.

China's key commodity imports, including crude oil, copper and iron ore, all climbed in August from the previous month, adding to evidence that demand in the world's second-largest economy was still going strong despite the economic turmoil in the West.

Group of Seven finance chiefs pledged on Friday to make a coordinated response to a slowdown in the global economy but offered few specifics and differed in emphasis on Europe's debt crisis.

Juergen Stark, the European Central Bank's executive board member and chief economist, resigned unexpectedly on Friday in conflict with the bank's policy of buying government bonds to combat the euro zone's debt crisis.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 11.9 percent last week, the exchange said on Friday.

The Nikkei stock average fell on Monday after Wall Street tumbled.

US stocks fell more than 2 percent on Friday after the top German official at the European Central Bank resigned in protest of the bank's bond-buying programme, which has been a major tool in fighting the region's debt crisis.

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