Tokyo rubber futures settled mostly lower on Thursday as investors took profits amid a lack of fresh positive incentives from the currency market and physical trade. The benchmark July rubber contract on the Tokyo Commodity Exchange finished down 2.2 yen per kg at the day's low of 139.0, slipping from the high of 141.2. The spot February contract ended up 0.2 yen at 132.1, with the remaining months losing 1.5 to 2.4 yen.

Brokers said the market was in a corrective phase after its jump to a four-month high this week. "The market has been consolidating, with the benchmark contract finding support at around 137 yen," one broker said.

Another broker said the contract could fall towards 130 yen, losing about 50 percent of the gains it posted in a rally from the January low of 118.3 yen to the February high of 146.9 yen.

The bull run in TOCOM rubber was driven by funds' short-covering amid the market's technical improvement and was also encouraged by a seasonal decrease in rubber supplies in Thailand the world's largest producer and exporter.

Open interest was 54,418 lots at the end of Wednesday trade, up from Tuesday's 53,796 lots.

Copyright Reuters, 2005