Tokyo rubber futures finished lower on Monday, surrendering to profit-taking after last week's rally, with operators watching the currency and energy markets for clues to the rubber market's direction, brokers said.
The benchmark January 2005 rubber contract on the Tokyo Commodity Exchange (TOCOM) settled down 3.4 yen per kg at the day's low of 137.7, slipping from the high of 140.0.
Spot August ended down 4.4 yen at 137.0, with other months losing 3.0 to 3.8 yen. "The market was ripe for profit-taking after climbing rapidly last week," a Tokyo broker said. "Selling was triggered by a firmer yen, and accelerated later by sharp losses in Tokyo's energy futures market."
High oil prices have fuelled expectations for a shift in tyre makers' demand to natural rubber from synthetic rubber a petrochemical product providing a buying incentive for participants in TOCOM's rubber market, brokers said.
TOCOM's benchmark rubber soared as high as 141.6 yen last on Friday, rebounding by 9.5 yen or 7.2 percent from the low of 132.1 yen set on July 26. Rubber contracts came under downward pressure in recent weeks due to an increase in physical supplies from major producers.
Output usually peaks from June to September in Thailand, the world's largest producer of natural rubber. In the currency market, the dollar was at 111.16/18 yen, down from around 111.35 in late US trade on Friday, and below a two-month high near 112.50 yen struck last on Thursday.
The dollar eased a touch against major currencies on Monday following a warning that al Qaeda may attack key buildings including the New York Stock Exchange and in the aftermath of weaker-than-expected US economic growth figures.
The volume of TOCOM rubber traded on Monday was estimated at 6,917 lots, up from 6,382 lots on Friday. Open interest stood at 36,543 lots at the end of Friday trade, down from Thursday's 36,803 lots.
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