Key Tokyo rubber futures slipped below the psychologically important 160 yen level to a near five-week low on Thursday as a firm yen versus the dollar weighed on investor sentiment. The key Tokyo Commodity Exchange rubber contract for November delivery was down 1.1 percent at 159.7 yen per kg at 0436 GMT, though up from an earlier trough of 158.9 yen, the lowest for any benchmark since May 18.
TOCOM rubber futures contracts continue to suffer from low trading volumes despite last month's launch of a new trading system, partially due to the absence of Chinese and other overseas investors, the exchange said on Wednesday. Physical traders in Asia were also watching the TOCOM market, waiting in particular to see if prices would be able to hold above the key 160 yen level.
He attributed the slow activity in the physical market on Thursday to potential buyers waiting on the sidelines in anticipation of a further decline in TOCOM futures prices. A decline in TOCOM futures prices could put pressure on spot prices. "Because the 160 (yen level) is broken, I think the market may want to go down a bit more," he said. US crude futures slipped a touch but continued to trade near $71 a barrel on Thursday, as traders weighed a steady dollar against bullish data on Chinese fuel exports and US crude inventories.
The dollar was little changed at 95.76 yen, but remained near its roughly two-week low of 95.51 yen marked on Wednesday, when the greenback dropped after tame US inflation data dampened speculation about a hike in interest rates.