TOKYO, June 4 (Reuters) – Key Tokyo rubber futures fell 3 percent on Thursday, dragged down by an extended fall in oil prices from a nearly seven-month high marked earlier this week.
* The key Tokyo Commodity Exchange rubber contract for November delivery <0#JRU:> fell 5.4 yen or 3.2 percent to 165.2 yen per kg.
* A drop below a key technical support point of 168 yen per kg triggered more selling, although Thursday’s settlement above the day’s low of 162.9 yen showed a sell-off had stopped for now, traders said.
* Also, falls were seen limited by recent firmness in the physical rubber market. Supplies remained tight after recent rain in Thailand, the world’s top producer.
* The dry wintering season, when rubber trees shed leaves and latex output drops, has started in the northern part of Indonesia’s main growing island of Sumatra. [ID:nSP490281]
* Oil steadied at $66 per barrel on Thursday a day after a 3.5 percent decline amid expectations that an economic recovery would eventually draw down oil inventories despite a rise in U.S. crude stocks. [O/R]
* The Tokyo market slipped followed a retreat in Shanghai <0#SNR:>, where sentiment was hurt by investor caution over the 20th anniversary on June 4 of a crackdown on pro-democracy protesters in Beijing’s Tiananmen Square, a manager at a Japanese commodity brokerage said.
* “The incident at Tiananmen Square 20 years ago is surely a factor weighing on the market mood. But things may get better when this risk is behind us,” the manager said.
* Chinese police were out in force on Thursday to prevent any commemoration of the crackdown. [ID:nSP352060]

Source: Reuters

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