Tokyo rubber futures inched down on Friday for the seventh consecutive day on a firm yen, although it closed above the day's lows on some late short-covering ahead of the weekend.
The benchmark March 2005 contract on the Tokyo Commodity Exchange settled down 0.3 yen per kg at 142.4 yen, just 0.1 yen below the day's high. The day's trough was 141.9 yen, as the contract continued to hover at around two-week lows.
Other months fell by 0.1 to 0.9 yen. Market players mostly adjusted their positions ahead of the weekend, a Tokyo analyst said. "Market players were reluctant to open new positions given that the spot contract will be expiring on Monday," he said.
The expiry would most likely provide a clue as to whether market sentiment would remain soft, he said. TOCOM rubber began its slide after hitting a 3-1/2 month high of 147.9 yen last week.
The dollar was at 107.53/7.61 yen, up slightly from 107.48 yen in late US trade and a four-month low of 107.35 yen on Thursday. The dollar regained some ground against the yen, as the market remained reluctant to push the US currency below the closely watched 107-yen mark.
TOCOM rubber players have also been keeping careful track of crude oil's volatile upward march because of its possible impact on consumption of the raw material, which is mainly used in Japan for producing automobile tyres.
Some traders anticipate a shift in demand from synthetic rubber, a petroleum product, to natural rubber, while others say higher crude prices will dampen consumer demand. Crude oil prices remained strong, but below the all-time high of $55.33 a barrel set on Monday, due to persistent fears that winter fuel supplies will be insufficient.
Slowing, but robust growth in world number two oil user China also helped boost oil prices.
US light crude was trading at around $54.59. The volume of TOCOM rubber traded on Friday was an estimated 4,262 lots, largely flat from Thursday's 4,113 lots.
Open interest stood at 27,570 lots as of the end of Thursday, versus 26,872 lots on Wednesday.