BANGKOK, Aug 28 (Reuters) – Tokyo rubber futures dropped 1.7 percent on Tuesday on stop-loss selling after the Thai cabinet rejected a plan to spend more on buying rubber to prop up prices.
The Tokyo Commodity Exchange rubber contract for February delivery, which started trading on Tuesday, fell 3.9 yen to settle at 226.1 yen ($2.87) per kg.
The previous benchmark January contract dropped 3.6 yen to settle at 225.1 yen per kg, after earlier marking a 3-week high of 229.5 yen.
“It was bad news from Thailand that weighed on the market,” said a Tokyo-based dealer.
The most-active rubber contract on the Shanghai Futures Exchange for January declined 180 yuan, or 0.8 percent, to settle at 22,365 yuan ($3,500) per tonne.
The Thai government on Tuesday turned down a plan to spend another 15 billion baht on buying rubber to support prices, saying it would monitor the situation to see if further intervention is necessary.
An intervention scheme launched in January has failed to raise unsmoked rubber sheet (USS3) to anywhere near the targeted price of 120 baht per kg and the government has bought only a fraction of the planned 200,000 tonnes.
Dealers said that steadier oil prices would support TOCOM futures, however.
The front-month September rubber contract on Singapore’s SICOM exchange was last traded at 261.0 U.S. cents per kg, down 3.5 cents.
($1 = 78.6650 Japanese yen)
($1 = 6.3568 Chinese yuan) (Reporting by Apornrath Phoonphongphiphat; Editing by Joseph Radford)
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