TOKYO, Nov 13 (Reuters) – Tokyo rubber futures fell on Friday on a decline in oil and other commodity prices, snapping a two-day rally to a 13-month high through Thursday.
* But strong fundamentals, being reflected in the recent firmness in physical rubber prices, lent support to the TOCOM market, traders said.
* The key Tokyo Commodity Exchange rubber contract for April delivery <0#JRU:> ended down 2.1 yen, or 0.9 percent, at 235.2 yen per kg.
* The April contract hit an intraday high of 238.7 yen on Thursday, the highest for any benchmark since October last year.
* “The Tokyo market was dragged down by a fall in other commodities prices,” said a trader at a Japanese brokerage.
“The topside seems limited for now around 240 yen,” he said, adding that hedging selling from Japanese importers was expected to continue as physical rubber prices in Thailand were still in discount to TOCOM futures prices.
* “The currency market is a focus,” he added. A higher yen would hurt sentiment on the TOCOM market as it deflates yen-based commodity prices.
* U.S. oil hovered around $77 per barrel on Friday, weighed down by gains in the dollar and a bigger-than-expected build in U.S. crude inventories. [O/R]
* The dollar was around 90.35 yen , up from the week’s 89.26 yen trough. [USD/]
* A rare rally in the U.S. dollar was the focus in Asia on Friday as investors wondered if President Barack Obama’s nine-day visit to the region would generate pressure on some countries to let their currencies rise. [ID:nSP501311]
* In the physical market, the premium in prices of Thailand’s STR20 against those of Indonesia’s SIR20 has narrowed to almost nil. [ID:nT218389]
* “Steady demand from major tyre makers is making a sellers’ market for Indonesia’s SIR20 grade,” said a manager at a Japanese trading company.
Chinese buyers have recently resumed buying of rubber from abroad, focusing on Malaysian and Thai products, which look less costly given the recent rise in prices of Indonesia’s SIR20, the manager said.

Source: Reuters

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