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TOCOM rubber slips to new 5-yr low on worries about China slowdown

TOKYO (Oct 2): Benchmark Tokyo rubber futures ended down 0.6 percent on Thursday after hitting a fresh five-year low as worries about slower demand in top consumer China and tumbling Japanese equities kept investor sentiment chilled.

The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for March delivery lost 1 yen to settle at 175.4 yen ($1.6117) per kg.

Earlier, the contract fell to 174 yen, the lowest since July 2009, before recovering slightly later in the day.

“Growing concerns about a weakening Chinese economy continued to weigh on the market after a big slide yesterday,” said Jiong Gu, analyst at Yutaka Shoji Co.

“It seems funds are boosting their selling positions lately.”

Falling equities and a higher yen also hurt the market, brokers said.

Japana’s Nikkei share average tumbled to one-month lows on Thursday as disappointing global manufacturing activity surveys stoked concerns over global growth, while the first confirmed case of Ebola in the United States fed into a risk-averse mood.

Against the yen, the dollar retreated 0.1 percent to 108.81 yen from the previous session’s six-year peak of 110.09.

Shanghai rubber markets are closed for a week-long National Day holiday that started from Wednesday.

“With widening worries about China, it may be difficult to predict the next resistance level. The market is expected to stay under pressure for a while,” Gu said.

The front-month rubber contract on Singapore’s SICOM exchange for November delivery last traded at 139.30 U.S. cents per kg, up 0.6 cents. (1 US dollar = 108.8300 Japanese yen)

– Reuters

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