Tokyo rubber futures slipped to a two-week low on Wednesday as crude oil prices took a break from their upward march, while a strong yen also weighed on the market.
The benchmark March 2005 contract on the Tokyo Commodity Exchange (TOCOM) settled down 2.3 yen per kg at 143.4 yen, falling from a session high of 144.6 yen. The day's low of 143.1 yen was the lowest level for the benchmark since it fell to 142.00 yen on October 6.
Other months fell by 1.2 yen to 1.9 yen. "People have been buying rubber partly because of the link they saw with high crude prices and today's rubber market decline was in reaction to crude prices calming down a bit," a Tokyo broker said.
Some market players have held the view that strong crude prices, which have been hitting fresh record highs on persistent supply worries, will shift demand to natural rubber as an alternative to synthetic rubber, a petroleum product.
Other traders have said that crude prices could also dampen consumer demand. US light crude futures were trading at $53.35 per barrel, down from a record peak of $55.33 struck on Monday.