Tokyo futures fall in light trade, hurt by weak stock prices

TOKYO: Benchmark TOCOM rubber futures fell on Monday in light trade, hurt by weak equity prices after economic data out of the United States and China underlined a murky outlook for growth in the world's two biggest economies.

The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery declined 1.7 yen, or 0.8 percent, to settle at 206.3 yen ($2.01) per kg, the lowest closing level since July 25.

"Rubber prices came under pressure as the Nikkei started in a weak tone and the weak sentiment remained in Tokyo even after a gain in the Shanghai market," said Toshitaka Tazawa, an analyst at Fujitomi Co.

Japanese stocks edged down to a more than one-week low on Monday as a sell-off in U.S. stocks and concerns over Argentina's default and Portuguese banking problems dampened risk appetite.

"With weak overseas economic data, together with relatively high level of rubber inventories in Shanghai, we don't expect much of buys for the coming weeks," Tazawa said.

Data on Friday showed U.S. job growth slowed a bit in July and the unemployment rate unexpectedly rose, pointing to slack in the labour market that could give the Federal Reserve room to keep interest rates low for a while.

Growth in China's services sector slipped to a six-month low in July as new orders rose at their weakest rate in at least a year, data showed on Sunday, taking some of the shine off an industry that has been a bright spot in the Chinese economy this year.

The most-active rubber contract on the Shanghai futures exchange for January delivery gained 115 yuan to finish at 15,615 yuan ($2,500) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for September delivery was last traded at 170.70 U.S. cents per kg, down 0.5 cents.