Tokyo Futures Plunge as Commodities Slump on Economy Worry

Key Tokyo rubber futures plunged on Friday (May 6), dragged lower by a slump in commodities markets across the board the day before and the yen's rise against the dollar.
The benchmark TOCOM rubber futures for October delivery fell as low as 353.2 yen per kg, down 33.6 yen or 8.7 percent from Monday's (May 2) settlement of 386.8 yen. Circuit breakers were hit and trade was temporarily halted when the October contract was indicated down more than 9 percent at the open. Japanese financial markets were closed from Tuesday to Thursday for national holidays.
U.S. crude rose above $100 on Friday (May 6), a slight rebound from a near record collapse the previous session, as weak economic data from Europe and the United States sparked a broad sell-off in commodities.
The dollar held onto chunky overnight gains and was within sight of key resistance levels as tumbling oil prices, lack of hints on an immediate rate hike by the European Central Bank and a series of soft U.S. data prompted unwinding in higher-yielding currencies.
Oil collapsed into free-fall on Thursday (May 5), diving as much as 10 percent and sending U.S. crude back under $100 a barrel as investors stampeded for the exits. The number of Americans filing for jobless aid rose to an eight-month high last week and productivity growth slowed in the first quarter, clouding the outlook for an economy that is struggling to gain speed.
Japan's Nikkei average fell 2 percent on Friday (May 6) after Wall Street was hit by a massive sell-off in commodities as a surge in weekly claims for jobless benefits intensified worries over a faltering economic recovery. Wall Street stock indexes fell for a fourth straight day on Thursday (May 5) as a massive sell-off in commodities spilled over into other markets, forcing investors out of higher-risk assets and rattling equities markets before Friday's U.S. payrolls data.
Auto parts supplier Tower International reported first-quarter results that blew past estimates on Thursday, while Visteon Corp lifted its full-year forecast even though first-quarter profit fell short of estimates.
(Reuters, Tokyo, May 6, 2011)