Tokyo rubber futures fell for the second straight session on Monday, pressured by the yen's strength and lower oil prices, but the market lacked energy to drive prices in one decisive direction, traders said. Fund operators held their short positions as they expected a further slide in prices reflecting weak technical trends, while end-users were looking for chances to buy on falls backed by steady demand, they said.
"There are no distinct factors which can drive the market now," said a trader at a Japanese commodity house. "Traders try to set trends by looking at the dollar and oil, but the rubber market would need to have its own factors in order to see more clear moves in prices."
The benchmark April contract on the Tokyo Commodity Exchange (TOCOM) closed down 0.8 yen per kg at 138.4 yen. It had moved in a range of 138.4 to 139.1 yen. Other contracts fell by 0.2 to 0.8 yen.
TOCOM rubber futures were generally supported as the prompt November contract has been holding above 135 yen, with end-users showing constant interest in buying rubber given bright domestic economic prospects.
But the market stayed careful about chasing rubber too strongly as the benchmark contract had stayed below the closely watched support of 140 yen for the past week.
TOCOM prices have been on a downward trend since hitting a 3-1/2 month high of 147.9 yen in mid-October as interest among fund operators quickly faded after rubber failed to break above 150 yen, traders said.
US light crude futures continued to shy away from psychologically sensitive $50 per barrel.
Turnover in TOCOM rubber was estimated at 2,778 contracts from Friday's 3,327 lots. Open interest stood at 30,564 contracts as of end of Friday compared with 30,432 lots on Thursday.
Open interest rose above 30,000 contracts on Thursday for the first time in about a month, but traders said it was still premature to say that investor interest has returned to rubber.