TOCOM inches lower on worries over slowing global economy on Dec.18

Benchmark Tokyo rubber futures inched lower on Tuesday, after retreating from a more than 2-month high hit in early trade, as worries over global economic growth weighed on the sentiment.

Asian equities were hit hard after a rout on Wall Street overnight following a slew of weak data globally.

The U.S. economy, which has been growing strongly this year, has started to show signs of fatigue, adding to growing evidence elsewhere, including in Europe and China, of a cooling momentum.

“Increasing fears over slower growth in global economy added to pressure,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

The Tokyo Commodity Exchange (TOCOM) rubber contract for May delivery  finished 0.3 yen lower at 171.3 yen  ($1.52) per kg, after touching the highest since Oct. 11 of 173.0 yen earlier in the session.

“The TOCOM may also run out of steam as the benchmark has reached near the October’s high,” Yoshida said.

TOCOM’s technically specified rubber (TSR) 20 futures contract for June delivery fell 0.3 percent to close at 148.0 yen per kg.

On further downside, the yen gained about 0.3 percent on the dollar as investors’ fears of slowing global growth increased demand for safety assets.

A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.

The most-active rubber contract on the Shanghai futures exchange for May delivery rose 90 yuan to finish at 11,425 yuan ($1,656) per tonne.

The front-month rubber contract on Singapore’s SICOM exchange for January delivery last traded at 126.1 U.S. cents per kg, down 0.1 cent.