Tokyo Futures Fall On Drop In Broad Commodities

Key Tokyo rubber futures fell on Friday (January 28), dragged lower by declines in broader commodities prices and as investors, wary of the recent rapid pace of price
increases, closed positions.
The benchmark rubber contract on the Tokyo Commodity Exchange for July delivery fell 7 yen or 1.5 percent to 460.3 yen per kg as of 0031 GMT.
The contract rose nearly 4 percent to as high as 474.8 yen on Thursday (January 27), and hit a record high of 474.8 yen on Monday (January 24).
At current levels the contract is set for a weekly drop of about 3 percent, the biggest in two months, after gaining about 4 percent last week.
The most active rubber contract on the Shanghai futures exchange for May deliver closed at 40,550 yuan ($6,162) per tonne on Thursday (January 27), up from Wednesday's 39,280 yuan. The contract rose as high as 40,830 yuan, just below a record high of 41,200 yuan hit on Monday (January 27). Volume stood at 630,734 lots.
Traders have said supply concerns, record high physical rubber prices and a solid demand outlook provide a strong case for long-term price increases, but investors may close positions in the near term, especially ahead of China's holidays when buying by the world's largest rubber consumer halts.
China begins the week-long Lunar New Year holiday on Feb.2.
U.S. crude futures extended declines to hit a near two-month low on Friday (January 28), weighed down by talk of OPEC raising output and weak economic data.
The yen nursed broad losses on Friday (January 28) after Standard & Poor's cut Japan's credit rating by a notch, though it fared relatively better against the dollar, which had troubles of its own.
(Reuters, January 28, 2011)