Tokyo rubber futures fell to a 1-week low on Wednesday as a surprise interest rate increase by China prompted players to unwind contracts, while Shanghai futures bounced back from lows as supply fears lingered. The benchmark rubber contract on the Tokyo Commodity Exchange fell 3.4 yen to settle at 335.2 yen per kg in heavy volume of 10,776 lots, but off its intraday low.
The contract fell as low as 328.0 yen, the lowest since October 12, as China's move sparked fears of possible tighter monetary policy and prompted an early sell off in commodities. "Today's panic sell-off has stopped and there is still buying force that helped prevent prices from falling below the 330 yen level. So, I think, prices could edge higher tomorrow," said a dealer in Thailand.
The most active Shanghai rubber futures for March delivery slipped more than 2 percent to an intraday low of 30,845 yuan per tonne before ending at 31,785 yuan, up from Tuesday's closing of 31,720 yuan. It was heavily traded at around 1.2 million lots.
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