Tokyo rubber falls tracking Shanghai plunge on May 22

Tokyo Commodity Exchange (TOCOM) futures fell on Wednesday, tracking a plunge in Shanghai futures, although strong physical prices in Thailand lent some support to the Tokyo market, dealers said. The benchmark TOCOM rubber contract for October delivery finished 2.8 yen, or 1.4%, lower at 191.5 yen ($1.73) per kg.

The most-active rubber contract on the Shanghai futures exchange for September delivery plunged 320 yuan to finish at 11,905 yuan ($1,723) per tonne.

"Shanghai futures came under pressure as they had been overbought since last week when China's biggest natural rubber plantation was forced to stop tapping due to drought in Yunnan Province," said Hideshi Matsunaga, an analyst at Sunward Trading. He added a flurry of selling came after the benchmark hit a technical resistance of around 12,445 yuan.

"But the TOCOM losses were cushioned by strong physical prices in Thailand which remained at this year's highs amid slower output due to dry weather and export curb by producing countries," he added.

TOCOM's technically specified rubber (TSR) 20 futures contract for November delivery closed down 0.4% at 163.5 yen per kg.

The front-month rubber contract on Singapore's SICOM exchange for June delivery last traded at 150.7 US cents per kg, down 1.0%.

The US administration is considering Huawei-like sanctions on Chinese video surveillance firm Hikvision, media reports show, deepening worries that trade friction between the world's top two economies could be further inflamed.

Japanese Prime Minister Shinzo Abe will treat US President Donald Trump to an imperial banquet, front-row seats at a sumo tournament and a trip to the country's biggest warship on a state visit as Tokyo seeks to avoid a bust-up over trade.

The US dollar was quoted around 110.41 yen, compared with around 110.15 yen on Tuesday afternoon

Oil prices fell on Wednesday after industry data showed an increase in US crude inventories and as Saudi Arabia pledged to keep markets balanced.

Japan's benchmark Nikkei stock average edged up on Wednesday in an overall cautious market as data showed another drop in the nation's exports for April, which offset a few positive signs for the economy.