RUBBER-Tokyo futures fall, but post third week of gains

Benchmark Tokyo rubber futuresfell 2.1 percent on Friday, driven lower by a stronger yen, butthe market posted a third week of gains amid hopes of economicrecovery in China, brokers said.The benchmark rubber contract on the Tokyo CommodityExchange (TOCOM) for December delivery fell 4.6 yen tosettle at 215 yen ($2.12) per kg, but rose 1.1 percent for theweek.

After touching a near-five-year low earlier this month, thebenchmark contract has recovered more than 11 percent over thepast three weeks, aided by higher crude oil prices and improvingeconomic data from top buyer China.

The yen was hovering near a one-month high of 101.39 against the dollar, following disappointing U.S. consumerspending data.

"The fall was largely due to a stronger yen," said KanameGokon, general manager of research at brokerage Okato Shoji inTokyo.

"The rise in deliveries of TOCOM rubber for June contractwas behind the recent strong gains. I do not know the reasonsbehind that, but the more the deliveries, the higher themarket."

There were 4,390 tonnes worth of deliveries for the Junecontract earlier this week, more than triple that for the Maycontract the month before.

Rubber supply from Thailand, the world biggest producer, washit by unseasonable rains, pushing prices higher, but demandremained thin with major tyremakers waiting to buy on a dip inprices, traders said.

Activity in China's factory sector expanded in June for thefirst time in six months as new orders surged, a survey showedearlier this week, offering new signs the economy is stabilisingthanks to Beijing's measures to shore up growth.

The most-active rubber contract on the Shanghai futuresexchange for September delivery fell 160 yuan to finishat 15,140 yuan ($2,400) per tonne.

The front-month rubber contract on Singapore's SICOMexchange for July delivery last traded at 176.50 U.S.cents per kg, down 2.7 cents.