TOKYO, Oct 21 (Reuters) – Tokyo rubber futures hit a fresh one-year high on Wednesday then slipped as a retreat in oil and other commodities prices put a brake on the speculative buying that had driven rubber up.
* The key Tokyo Commodity Exchange rubber contract for March delivery <0#JRU:> fell 1 yen or 0.4 percent to 225.2 yen per kg from the previous settlement. The contract traded in a very narrow 4-yen range after hitting a fresh one-year high of 227.3 yen earlier in the day.
* U.S. crude futures dropped below $79 a barrel on Wednesday, extending the previous session’s losses away from a one-year peak after a bigger-than-expected rise in U.S. crude oil inventories. [O/R]
* “Sentiment is quite firm as there are buyers out there, while supplies remain tight,” said a senior trader at a Japanese trading firm.
* “Japanese and European tyre makers are trying to catch up on their buying as they had been refraining from buying. They are buying just the amount needed, but given the supply side situation, it helps firm the market,” he said.
* Traders said the physical rubber market remained supported by prolonged supply tightness, with the world’s No. 2 rubber producer, Indonesia, still in the wintering season, when latex output falls.
* Frequent rain in Thailand and parts of Malaysia, the No. 1 and No. 3 producer respectively, also led to less supplies.
* The dollar edged lower against the euro and higher-yielding currencies on Wednesday as a brief recovery from a 14-month low versus a currency basket fizzled out, helped by equity market gains that encouraged risk-taking. [USD/]
* Against the yen, the dollar eased 0.1 percent to 90.67 yen . A higher yen deflates yen-priced rubber futures and dampens sentiment.
* U.S. stocks retreated from 12-month highs on Tuesday as disappointing housing and inflation data prompted investors to book recent gains despite strong results from bellwethers including Apple and Caterpillar. [.N]

Source: Reuters

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