Tokyo rubber dips to 1-month low as oil falls

TOKYO, Jan 18 (Reuters) - Tokyo rubber futures fell sharply to a fresh one-month low on Friday as falls in oil prices and a firming yen prompted strong selling by investment funds.

Rubber prices were also put under pressure as increasing concerns over U.S. recession and falling global equities prices could restrain investments in commodities.

The benchmark Tokyo Commodity Exchange rubber contract for June delivery <0#JRU:> fell as low as 287.0 yen per kg -- the lowest for the contract since Dec. 12.

As of 0047 GMT, the key June TOCOM rubber contract was trading at 288.2 yen, down 5.0 yen or 1.7 percent from Thursday.

The key contract fell through the 50-day moving average of 290.4 yen.

U.S. crude oil futures fell sharply on Thursday for the third straight session, after Federal Reserve Chairman Ben Bernanke warned that the U.S. economy faces weaker growth this year, although the Fed is not forecasting a recession.

The yen firmed as the dollar retreated on Thursday after Bernanke comments.

Lower oil prices encourage the use of synthetic rubber, a petroleum product, instead of natural rubber, while a higher yen against the dollar effectively lowers the prices of TOCOM rubber.

But traders were careful about selling rubber too strongly as production of natural rubber was expected to drop as Thailand, the world's top rubber producer, and number three Malaysia normally enter the wintering dry season, when rubber trees produce less latex, around the end of February. (Reporting by Chikafumi Hodo; Editing by Alex Richardson)