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TOKYO, Aug 21 (Reuters) – Tokyo rubber futures fell over 1 percent to dip below 195 yen on Friday as selling gathered pace after the industrial commodity topped but failed to stay above the key 200-yen level this week.
* Investor sentiment was undermined by a rise in the yen and after oil and many other commodity prices tracked a fall in regional equity markets. A higher yen deflates yen-based commodity futures prices.
* The key Tokyo Commodity Exchange rubber contract for January delivery <0#JRU:> settled at 194.0 yen per kg, down 1.3 percent from the previous day.
* Earlier this week, the contract rose as high as 208.9 yen.
* The January contract fell 7 percent on the week, marking the biggest weekly fall since mid-May and reversing a rally last week to reach 214.0 yen on Aug. 14, the highest for any benchmark since October.
* “Today’s retreat was due to a stronger yen and a drop in other markets,” said a manager at a Japanese trading firm. “Dominant players now are trend followers… They’re looking at stock markets as well as oil and the yen as a clue for direction,” he said.
* U.S. crude oil reversed earlier gains to fall below $73 per barrel on Friday as optimism over the pace of demand recovery in top energy consumer, the United States, faded on the back of mixed economic data. [O/R] [ID:nLL222515]
* The U.S. government said on Monday it would suspend its popular “Cash for Clunkers” auto rebates as the programme’s $3 billion budget runs dry, a month after it was launched. [ID:nN209152]
* Rubber prices on the physical market have remained relatively firm, underpinned by consistent buying by tyre makers. Also, supplies of raw material remain tight due to rains disturbing tapping in Thailand, the world’s biggest producer, traders said.
* On Thursday, tyre makers bought Thailand’s RSS3 grade at $2.02 per kg and Indonesia’s STR20 grade at $0.82 per pound, the manager said.
* In currency markets, the yen surged to a one-month high against the dollar on Friday, as traders remained worried about the potential for further weakness in Chinese shares and shied away from risky investments. [USD/]
* Japan’s Nikkei stock average <.N225> fell 1.4 percent. Market players said Japanese stocks extended losses in the afternoon due to a stronger yen, which curbs exporters’ profits when repatriated, and weakness in the Hang Seng Index <.HSI> as investors nervously watch moves in Chinese stocks for cues. [.T]
Source: Reuters