TOCOM steady as investors adjust positions; trade thin

Benchmark Tokyo rubber futures steadied in thin trade on Tuesday as investors made position adjustments following the start of the new December contract while nagging worries about oversupply in Asia capped gains from stronger oil prices and a weaker yen.

Oil prices rose for a fourth consecutive session on Tuesday as investors covered short positions, although worries over a persistent global supply glut still lingered.

The dollar rose on Tuesday to its highest level against the yen in nearly five weeks ahead of comments from Federal Reserve Chair Janet Yellen that are expected to underline her positive view of the U.S. economic outlook.

A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.

The Tokyo Commodity Exchange (TOCOM) rubber contract for new December delivery finished at 193.6 yen ($1.74) per kg, unchanged from its opening price. It rose to a high of 195 yen earlier in the session.

"Investors were adjusting their positions to match a gradual shift from backwardation to contango in the TOCOM," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

"Besides, there was no fresh news," he added.

In contango, longer-dated futures are more expensive than near-term contracts.

The most-active rubber contract on the Shanghai futures exchange for September delivery rose 270 yuan to finish at 12,955 yuan ($1,899.95) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for July delivery last traded at 141.0 U.S. cents per kg, up 0.8 cent. ($1 = 111.5400 yen) ($1 = 6.8186 Chinese yuan)