Tokyo rubber falls

Key Tokyo rubber futures fell 3 percent on Friday, extending losses into a third session as investors remained wary about demand after a slew of bearish earnings news from the global auto sector. The benchmark Tokyo Commodity Exchange rubber contract for July delivery fell 2.9 percent or 4.1 yen to 138.2 yen per kg by the midday session close.
The contract fell as low as 137.8 yen, nearing a one-month trough of 134.8 yen marked on January 23. "The market is being caught up in a range of between 135 and 150 yen," said a manager at Tokyo-based commodity brokerage, adding the market should be prepared more for the downside risk than a case of rising above 150 yen.
"A sell-off could hit commodities again if the global stock markets fall below the November lows, wiping off any positive views spread in light of massive economic stimulus in the United States and other countries," he said. In the auto sector, Ford Motor Co reported a record $14.6 billion full-year loss on Thursday but said it would have the cash to survive the worst downturn in auto sales in decades without a US government bailout.
Rival Toyota Motor Corp's operating loss for the year to March 31 is likely to exceed its latest loss forecast of 150 billion yen ($1.67 billion), a company source said on Friday, citing massive production cuts planned in the coming months.
The dollar inched down to 89.50 yen on Friday, dented by a fall in stocks and extending losses after hitting a one-week high of 90.79 earlier this week. US oil prices steadied in Asia as concerns about a potential strike among unionised US refinery workers kept in check demand worries.
The rubber market's downside is seen as limited as the world's top three producing countries - Thailand, Indonesia and Malaysia have started cutting first-quarter exports in line with a plan they made late last year to prop up prices. The physical market followed TOCOM prices lower in quite trade as China, the largest rubber consumer, was away throughout this week, celebrating the Lunar New Year holiday.