TOKYO, July 29 (Reuters) – Tokyo rubber futures tumbled as
much as 4 percent towards 180 yen on Wednesday, snapping a 10-day
rally that took prices to an 8-½ month high after being
pressured by a dip in oil prices and a firmer yen.
* The Tokyo Commodity Exchange benchmark rubber contract rose
about 24 percent during the 10-day rally that briefly lifted
prices above 190 yen on Tuesday.
* “There was a feeling of achievement in the market after
having touched 190 yen … and then today we have lower oil and a
slightly higher yen to push prices down further,” a Tokyo-based
broker said.
* The key Tokyo Commodity Exchange rubber contract for
January 2010 delivery <0#JRU:>, which debuted on Tuesday, closed
at 181.9 yen, 181.9 yen, down 7.1 yen or about 3.8 percent from
Tuesday after hitting an intra-day low of 181.3 yen, down 7.7 yen
or about 4 percent.
* It rose as high as 190.1 yen on Tuesday, the highest for
any benchmark since Nov. 10, as buying by investment funds
continued on rising risk tolerance amid optimism about the
economic recovery.
* Shuji Sugata, a manager at Mitsubishi Corp Futures and
Securities, said despite a rise in TOCOM trading volume in the
recent rally, most of the transactions were made by investors
seeking short-term returns.
* “The recent rally was led by a rise in non-commercial long
positions. That suggests these positions were mainly built up by
trend-followers,” he said.
* Open interest, a gauge to measure market liquidity, has
been slow to increase relative to a recent rise in daily trading
volume, reflecting the typical attitude of such players to close
out their positions on the same day, he said.
* Tight supply due to rain in some producing countries, which
has disrupted tapping, had partly helped to boost physical rubber
prices.
* Traders based in Thailand said that global tyre makers and
Chinese dealers were looking to buy rubber, amid optimism about
the global economy and improved prospects for demand for the
industrial commodity.
* Physical rubber prices have steadily risen due to tight
fundamentals, traders said.
* U.S. crude futures dropped below $66 a barrel on
Wednesday, extending losses for a second day after a sharp
sell-off in buoyant Chinese shares triggered wider losses in risk
assets. [O/R]
* The U.S. currency inched down 0.2 percent to 94.35 yen.

Source: Reuters

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