Tokyo futures plunge 3pc in volatile trade

TOKYO: Key Tokyo rubber futures settled down 3.1 percent after plunging as much as 6.2 percent on Wednesday, and the market may struggle to stay above key support at 300 yen before a long holiday in China and due to worries that upcoming US data may disappoint.

The key Tokyo Commodity Exchange rubber contract for March delivery fell 19.7 yen to settle at 309.7 yen per kg, down 19.7 yen, after plunging as low as 299.7 yen, the lowest since September 2010.

The most active Shanghai rubber contract for January delivery fell 2.6 percent to close at 27,540 yuan per tonne. Volume stood at 1,349,048 lots.

Less-than-expected speculative buying in China, ahead of a week-long national holiday starting in early October, disappointed investors and prompted them to sell, Kazuhiko Saito, chief commodities analyst at trading company Fujitomi Co.

"We can't say the market won't break through the 300 yen mark, given an absence of Chinese buyers and worrying US job data that come out next week," he said, adding buying may come back after the Chinese holiday.

Commodities fell on Wednesday, giving up their biggest daily gain in more than six months racked up the previous day, as investors flocked to the US dollar on concern data may signal slowing economic growth, and optimism over Europe's efforts to resolve its sovereign debt problem proved short-lived.

Brent crude fell below $107, after sharp gains a day earlier, weighed down by a stronger dollar.

The yen rose, buoyed by Japanese fund repatriation and buying by Japanese exporters, while the euro dipped as investors waited to see whether European policymakers will push ahead with reforms to the euro zone's rescue fund.

Japanese shares inched up but struggled to hold gains.

Toyota Motor Corp , the world's biggest automaker, said on Wednesday its global output rose 10.6 percent in August from a year earlier to 626,817 vehicles.

A source told Reuters that Nissan Motor Co , Japan's No. 2 automaker, is planning to invest $1.5 billion to build a factory in Brazil that might produce electric cars.

The International Rubber Consortium (IRCo) has asked Thailand, Indonesia and Malaysia to curb exports if rubber prices fall further in the wake of a global economic slowdown, a senior Thai official said on Tuesday.

Natural rubber prices in India are likely to edge lower this week on weak demand from tyre makers and as supply in physical market has been rising due to favourable weather, dealers said on Tuesday.

Copyright Reuters, 2011