Benchmark Tokyo rubber futures slid on Tuesday, following a plunge in Shanghai futures while a firmer yen prompted fresh selling after market participants in Tokyo returned from a public holiday on Monday. The Tokyo Commodity Exchange (TOCOM) rubber contract for August delivery finished 5.0 yen, or 1.9 percent, lower at 263.0 yen ($2.33) per kg.
"Weaker Shanghai futures and the yen's gain weighed on market sentiment," said Hiroyuki Kikukawa, general manager of research at Nissan Securities. The most-active rubber contract on the Shanghai Futures Exchange for September delivery plunged 575 yuan, or 3.1 percent, to finish at 17,975 yuan ($2,606) per tonne. "If the TOCOM benchmark slips below a key resistance of 250 yen, selling may get further momentum," Kikukawa said, adding that any further gains in the yen will also add to pressure. The front-month rubber contract on Singapore's SICOM exchange for April delivery last traded at 199.0 US cents per kg, down 3.3 cents.
Rubber inventories at TOCOM-approved warehouses had dropped to 1,317 tonnes as of March 10, the lowest since July 2010 and down about 80 percent from a year ago, according to TOCOM data. The US dollar added 0.2 percent to 112.79 yen as bargain-hunting emerged after it dipped as low as 112.26 earlier, its deepest trough since February 28.