SINGAPORE: Japanese rubber futures erased earlier gains on Monday, as concerns over recovery in the US and China, the world’s two largest economies, weighed on global markets.

The Osaka Exchange (OSE) rubber contract for January delivery closed down 3.1 yen, or 0.98%, at 312.2 yen ($2.19) per kg.

The January rubber contract on the Shanghai Futures Exchange (SHFE) fell 25 yuan, or 0.16%, to finish at 15,615 yuan ($2,186.36) per metric ton. Fresh concerns over a slowing US economic recovery came amid persistent weak demand from China, adding to worries over demand prospects for natural rubber, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.

The US unemployment rate jumped to near a three-year high of 4.3% in July amid a significant slowdown in hiring, heightening fears the labour market was deteriorating and potentially making the economy vulnerable to a recession.

The jobs data, coming on top of a string of weak earnings reports from large technology firms and heightened concerns over the Chinese economy, drove a global sell-off in stock markets, oil and high-yielding currencies as investors sought the safety of cash. Japan’s Nikkei shed a staggering 13% to hit seven-month lows, a scale of losses not seen since the 2011 global financial crisis. The yen hit its highest levels against the dollar since January. A stronger currency makes yen-denominated assets less affordable to overseas buyers.

Oil futures extended losses, as fears of a recession in top oil consumer the US offset supply worries stemming from mounting tensions in the Middle East, the world’s largest oil producing region. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The front-month September rubber contract on Singapore Exchange’s SICOM platform last traded at 167.8 US cents per kg, up 0.2%.