TOCOM hits near three-week low on softer oil prices

Benchmark Tokyo rubber futures ended slightly lower on Wednesday, after hitting a near three-week low earlier in the session, pressured by softer oil prices, but trades were thin with many investors staying reluctant to take bets amid low volatility.

"Trade remained lacklustre even though Japan's traditional Obon holiday ended last week," said a Tokyo-based dealer.

"There were no major reasons to sell, but a rumour that shipment in Thailand is on the rise partly weighed on the market," he said.

The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery <0#2JRU:> ended down 0.4 yen at 151.7 yen ($1.52) per kg. It touched its lowest since Aug. 5 at 151.1 yen in an overnight session, hurt by weakening oil prices.

Brent oil fell 1.5 percent on Wednesday on an unexpected increase in U.S. crude stocks that revived worries about the supply glut that has capped prices for the past two years.

"There is no clear direction in the market right now. No one wants to make bets under the current condition," the dealer said.

The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have been stuck within a narrow-trading range of between 145 and 165 yen since late May.

The most-active rubber contract on the Shanghai futures exchange for January delivery fell 30 yuan to finish at 12,615 yuan ($1,896.79) per tonne, extending losses into a third session.

The front-month rubber contract on Singapore's SICOM exchange for September delivery last traded at 126.3 U.S. cents per kg, down 1.3 cent.