Tokyo futures at 2-week low on economy concerns

BANGKOK: Tokyo rubber futures slumped to a two-week low on Tuesday, weighed down by persistent fears of a weaker global economy but given some support from firm oil prices, dealers said.

The benchmark rubber contract on the Tokyo Commodity Exchange for February delivery fell 4.6 yen to settle at 356.3 yen ($4.6) per kg. It fell more than one percent to 355.9 yen, the lowest since August 23.

The most active Shanghai rubber contract for January delivery was up 115 yuan to finish at 32,910 yuan ($5,153) per tonne.

"An unfinished problem in Europe still weighed on TOCOM prices as it ignited fears of falling demand," one dealer said.

The European Union is still working on adopting a convincing, longer-term approach to tackling problems relating to national budgets and euro-zone governance, European Commission President Jose Manuel Barroso said on Tuesday.

Dealers said they expected TOCOM prices to move in a narrow range of 350-360 yen per kg this week as concerns on weak economy could still weigh.

However, demand on the physical market and firmness in oil prices should lend some support.

Brent crude was steady at above $110 a barrel on Tuesday, as the market weighed expectations for further economic stimulus in the US against a worsening euro zone debt crisis.

Copyright Reuters, 2011