TOKYO, Oct 1 (Reuters) - Key Tokyo rubber futures slid for athird straight session on Tuesday as the start of a U.S.government shutdown dented market sentiment and fuelled demandworries for the soft commodity.
Tokyo Commodity Exchange (TOCOM) futures, which set the tonefor tyre rubber prices in Southeast Asia, also got hit as theyen strengthened throughout trading hours.
The benchmark TOCOM rubber contract for March delivery dropped 1.8 percent to settle at 260.9 yen per kg, aftertrading as low as 260.6 yen, the lowest since Aug. 22.
"Like other financial products the U.S. government shutdownhas hurt market sentiment for rubber over the last few days,"said a Bangkok-based trader.
If the contract falls below 260 yen, some traders would lookat buying on dips, said the trader, adding trading action lookedto be limited with Chinese market players away for holidays.
The U.S. government began a partial shutdown on Tuesday forthe first time in 17 years, potentially putting up to onemillion workers on unpaid leave, closing national parks andstalling medical research projects.
The benchmark Nikkei 225 pared much of its earlygains to close 0.2 percent higher, weighed down by worries aboutthe consequences of government closure in the world's biggesteconomy.
The index advanced as much as 1.3 percent after Japanesemanufacturers' sentiment rose sharply in the three months toSeptember to a near six-year high, a closely-watched centralbank survey showed.
The U.S. dollar was quoted around 97.91 yen inafternoon Asian trade, below its session high of 98.73 yentouched in the morning.
A stronger yen makes dollar-based rubber cheaper andnormally encourages players to sell contracts to cut losses.
Adding some support to the contract, crude rubberinventories at Japanese ports stood at 4,708 tonnes as of Sept.20, ticking up from a three-year low in the previous release,industry data showed earlier in the day.
The Shanghai rubber market was shut on Tuesday for theNational Day holiday.
The front-month rubber contract on Singapore's SICOMexchange for November delivery last traded at 230.20U.S. cents per kg, or 2.80 cents lower. (Reporting by James Topham; Editing by Subhranshu Sahu)
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