Tokyo futures nearly flat, weak technicals weigh

TOKYO: Key Tokyo rubber futures settled nearly flat on Thursday, with investors lacking fresh incentives to break out of ranges and as worries about the yen's strength and weak technicals weighed on sentiment.

The benchmark rubber contract on the Tokyo Commodity Exchange for January delivery settled at 362.2 yen per kg, down 0.2 yen on the day.

The most active Shanghai rubber contract for January delivery fell 1 percent to close at 33,745 yuan ($5,283.305) per tonne. Volume rose to 670,662 lots from Wednesday's 574,662 lots.

Japan's Nikkei stock average fell for a second straight day on Thursday and dropped below the closely watched 9,000 line, hurt by the yen's persistent strength and fears the United States might be heading for another recession, with many investors on the sidelines ahead of US economic data.

The Swiss franc fell against the euro and the dollar on Thursday, with traders citing talk that the Swiss National Bank was adding liquidity via the currency forwards market.

The yen has also been hovering near record highs against the dollar, hurting the already fragile Japanese economy which is struggling to recover from the March 11 earthquake. A strong yen dampens sentiment as it deflates the value of yen-priced TOCOM rubber futures prices.

Senior finance ministry and Bank of Japan officials on Thursday met to exchange views on currency rates, the central bank said, a sign that Tokyo remains geared up for further action to stem persistent rises in the yen.

The rubber market has stayed below key technical levels over the past week, such as the 50-day moving average which on Thursday stood at 375.5 yen.

Worries about global growth weighed on commodities broadly.

Brent crude fell 0.2 percent on Thursday, staying below $111 a barrel on Thursday as ongoing concerns over Europe's debt crisis and a firmer dollar drew investors away from riskier assets like oil and into the safe havens of gold and the Swiss franc.

Copyright Reuters, 2011
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