TOCOM falls on growing US-China tensions, surging virus cases

TOKYO: Tokyo Commodity Exchange (TOCOM) rubber futures fell on Tuesday on concerns that growing US-China tensions and new restrictions amid surging coronavirus cases in many parts of the world could stall a global economic recovery.

TOCOM's rubber contract for December delivery finished 0.5 yen lower at 156.3 yen ($1.46) per kg.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 10 yuan to finish at 10,600 yuan ($1,511) per tonne.

The United States on Monday rejected China's claims to offshore resources in most of the South China Sea, drawing criticism from China which said the US position raised tension in the region, highlighting an increasingly testy relationship.

Australian states tightened borders and restricted pub visits on Tuesday, while Disney prepared to close its Hong Kong theme park and Japan stepped up tracing as a jump in novel coronavirus cases across Asia fanned fears of a second wave of infections.

Weaker oil and equities markets also dented risk appetite. Oil prices fell on Tuesday on worries over surging US and Asian coronavirus cases.

Japan's benchmark Nikkei stock average slipped 0.9%.

But a softer yen provided support as it makes yen-denominated assets more affordable when purchased in other currencies. The US dollar was quoted around 107.37 yen, compared with 106.90 yen the previous day.

The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 116.9 US cents per kg, down 0.5%.

India on Monday imposed 10% import tax on polybutadiene rubber sourced from South Korea in an attempt to support local producers, the government said.

India's auto sales volume will take another 3-4 years to reach 2018 levels, an industry body executive said on Tuesday.