TOKYO, Feb 27 (Reuters) - Key TOCOM rubber futures fell to a two-month low on Wednesday, extending the previous day's 3-percent decline as the yen remained strong amid concerns that political gridlock in Italy may reignite the euro zone financial crisis.
FUNDAMENTALS
* The newly-listed August contract was changing hands at 288.3 yen per kg, down 1.5 yen from the previous close, as of 0102 GMT. The contract earlier dropped to 286.6 yen, the lowest level since Dec. 25.
* Chinese investors have been piling up rubber as collateral for financing, recently driving prices to 10-month highs, in what could be a risky bet as warehouses in the world's top user fill up with a commodity that can only be stored for a limited time.
* Vietnam surpassed Malaysia in 2012 to become the world's third-largest rubber exporter, after Thailand and Indonesia.
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MARKET NEWS
* The yen held near one-month highs on Wednesday, remaining susceptible to bursts of short-covering as political uncertainty in Italy kept the euro under the gun.
* Japan's Nikkei share average edged up on Wednesday on short-covering after falling sharply on the previous day, as hopes for continuing U.S. Federal Reserve stimulus boosted Wall Street.
* U.S. crude futures edged towards $93 a barrel on Wednesday after Federal Reserve Chairman Ben Bernanke eased fears of an early retreat by the Fed from its economic stimulus.
DATA EVENTS
* The following data is expected on Wednesday: (Time in GMT)
0700 Germany GfK consumer sentiment
0745 France Consumer confidence
0900 Italy Business confidence
1000 Euro zone Business climate
1000 Euro zone Economic sentiment
1330 U.S.
Durable goods orders
1500 U.S.
Pending homes sales
1500 Federal Reserve Chairman Ben Bernanke delivers
semi-annual testimony on the economy and monetary
policy before the House Financial Services Committee
1730 European Central Bank President Mario Draghi speaks
1530 U.S.
EIA petroleum status report
(Reporting by Risa Maeda; Editing by Joseph Radford)
