Tokyo rubber futures fell almost 1 percent on Tuesday, a day after their challenge above a key resistance of 260.0 yen per kg failed, while a stronger yen weighed on the yen-denominated prices. The benchmark rubber contract on the Tokyo Commodity Exchange for December delivery fell 2.2 yen, or 0.9 percent, to 257.6 yen as of 0030 GMT.
The spot July contract, which is due to expire on July 25, fell 2.2 yen to 252.0 yen. The dollar fell to a two-month low below 120.70 yen and hovered near a record low against the euro on Tuesday as worries about US subprime mortgage woes hurting the credit market and the economy still weighed.
A stronger yen deflates yen-based commodity prices, which are globally traded in the dollar. On Monday, the December contract rose as high as 261.8 yen, the highest for any benchmark since June 26, but later succumbed to profit-taking. It closed down 1.0 yen at 259.8 yen.
Falls were limited amid worries over disruptions in rubber supplies due to rain in the southern parts of Thailand, the world's top producer, in coming days. The December contract's initial support is around 256.4, its 200-day moving average as of Monday's close. Supplies usually pick up in major rubber producing countries in Southeast Asia this month, while orders from users slow down ahead of the summer holiday season.