Expectations that the spot June contract will expire at alower price later this month due to the view that a large amount of poor quality rubber will come into the market, along with easier Thai rubber offer prices to Japan, were cited as bearish factors, they said.

Although domestic rubber stocks as of May 20 declined slightly from May 10, stock levels remained higher than appropriate levels amid poor domestic demand for tyres, reflecting the ailing domestic economy, they said."Currently, market bears account for about 70 per cent of total market players, and market bulls are in a difficult position," an analyst at a commodity brokerage said.

"Sentiment will deteriorate if benchmark March breaks under 102.00 yen, although there is caution that the market is oversold," he added. Growing hedging needs by trade houses after they bought natural rubber in producingcountries recently, combined with recent rainfalls there, will continue to undermine sentiment, he said.

Thai rubber to Japan was offered at 73.50 US cents per kg on an f.o.b basis, down from 78.00 US cents on Monday this week, due partly to weak Thai currency and strong US dollar.

Domestic rubber stocks amounted to 43,727 tonnes as of end-May, down by 1,102 tonnes from May 20, according to the Rubber Trade Association of Japan.