SINGAPORE: Japanese rubber futures climbed on Wednesday, tracking gains in Shanghai futures and the Nikkei share average, while a softer yen made yen-denominated assets more affordable when purchased in other currencies.
The Osaka Exchange rubber contract for November delivery finished up 4.8 yen, or 2%, at 254.8 yen ($1.97) per kg, the largest daily percentage increase since April 4.
“Today’s price movement does not seem to be driven by demand. It is most likely due to some covering of shorts in the market,” said Farah Miller, chief executive officer of Helixtap Technologies, an independent rubber-focused data company.
“A weaker yen would also have given some support to OSE,” she added.
Japan’s benchmark Nikkei share average was up 0.7% on Wednesday.
The dollar traded at 129.45 yen against 127.88 yen on Tuesday afternoon in Asia.
Japanese auto companies are likely to post record profits this year as they raise vehicle prices and cut costs to mitigate the hit from soaring inflation, J.P. Morgan analysts said on Tuesday.
The rubber contract on the Shanghai futures exchange for September delivery was up 100 yuan to finish at 13,320 yuan ($1,993.83) per tonne.
Shanghai sprung back to life on Wednesday after two months of bitter isolation under a ruthless COVID-19 lockdown, with people driving cars again or cramming into trains and buses to go back to work.
The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 167.1 US cents per kg, down 0.3%.
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