Benchmark Tokyo rubber futures gave up early gains to close lower on Wednesday, extending falls into a third session, amid fears that escalating US-China trade tensions may hurt the global economy.
China hit back on Wednesday at the Trump administration's plan to slap tariffs on US$50 billion in Chinese goods, retaliating with a list of similar duties on key US imports including soybeans, planes, cars, whiskey and chemicals.
"Worries over an escalation of US-China trade row prompted fresh selling," said a Tokyo-based dealer who declined to be named.
The Tokyo Commodity Exchange (TOCOM) rubber contract for September delivery finished 0.5 yen lower at 179.6 yen (US$1.7) per kg, after rising to a high of 180.9 yen earlier in the session.
"Investors also unwound their positions ahead of the China holidays," the dealer said.
China's financial markets are closed on Thursday and Friday for the Tomb Sweeping Day holiday or Qingming.
"It looks that the rubber market will stay under pressure due to concerns over trade war, but we may see a technical rebound in the short term as the TOCOM has been oversold," the dealer said.
The most-active rubber contract on the Shanghai futures exchange for September delivery fell 130 yuan to finish at 11,340 yuan (US$1,800) per tonne. The front-month rubber contract on Singapore's SICOM exchange for May delivery last traded at 134.6 US cents per kg, down 2.3 cents.
Source: The Edge Markets