Key Tokyo rubber futures fell to a six-week low on Thursday as a rise in the yen and worsening chart outlook hurt investor sentiment already soured by increasing supply in producing countries. The key Tokyo Commodity Exchange rubber contract for December delivery closed at 257.3 yen per kg, down 6.2 yen or 2.4 percent from the previous close.
The contract earlier fell as low as 256.7 yen, breaking below the recent low of 256.9 yen and falling to the lowest for any benchmark since June 9, when it fell to 253.6 yen.
On Wednesday, the December contract hit a one-week high of 266.8 yen. "Investor sentiment is getting hurt by a higher yen and weakness in other commodities prices," said a rubber trader based in Tokyo. "The situation of tight supply in producing countries has been improving, so bearish players now have a bigger voice in the market," he said. The spot July contract rose 5.2 yen to 357.2 yen ahead of its expiry on July 26. Thailand, the world's biggest producer and exporter of rubber, is expanding its cultivation with a further 128,000 hectares (316,300 acres) of plantations from next year, a deputy agriculture minister said on Thursday.
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