BANGKOK, Jan 13 (Reuters) – Tokyo rubber futures retreated from a 15-month high on Wednesday, weighed down by weaker oil prices and the stronger yen, dealers said.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> fell 3.3 yen to settle at 296.6 yen ($3.25) per kg, retreating from the 300.4 yen per kg hit the previous day, the highest since September 2008, on stop-loss selling.
* “Players unwound rubber contracts after seeing oil prices fall,” a Japanese dealer said.
* Falling oil prices usually trigger stop-loss selling on rubber futures as they make synthetic, petrochemical-based rubber cheaper than natural rubber.
* Oil fell more than $1 on Wednesday to below $80 a barrel after an industry group reported an unexpected rise in U.S. distillate stocks, adding to growing fuel supplies despite a severe northern hemisphere winter. [nSGE60C05S]
* Another key factor that hammered rubber futures down was the firmer yen, which made dollar-based rubber cheaper and encouraged players to liquidate contracts to stop losses.
* The yen held broad gains on Wednesday as investors unwound short yen positions following China’s step to tighten monetary policy. [nSGE60B0LN]
* However, traders said 295.0 yen was seen as a strong support level on TOCOM as demand on the physical front should help boost prices.
* Thailand, the world’s biggest rubber exporter, said on Wednesday that current rubber prices were reasonable and repeated it had no rubber stocks it could release to influence market prices. [nSGE60C046] ($1=91.14 YEN)

Source: Reuters

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