SINGAPORE: Japanese rubber futures fell on Thursday, tracking losses in the Shanghai market and domestic equities, as continued global recessionary fears weighed on sentiment, while a stronger yen added pressure.
The Osaka Exchange rubber contract for June delivery was down 2.0 yen, or 0.9%, at 227.1 yen ($1.77) per kg as of 0200 GMT. The rubber contract on the Shanghai futures exchange for May delivery was down 140 yuan, or 1.1%, at 13,245 yuan ($1,954) per tonne. Japan’s benchmark Nikkei share average opened down 0.93%.
The US dollar was last 0.4% lower against the Japanese yen at 128.42, unwinding most of its previous day’s rally in the immediate aftermath of the BOJ’s decision to stand pat on its ultra-loose monetary policy. A stronger Japanese currency makes yen-denominated assets less affordable when purchased in other units. Japan’s export growth slowed sharply in December as Chinese demand remained under pressure, while imports jumped, keeping the trade balance in the red for the 17th straight month. Toyota Motor Corp on Wednesday said it plans to produce about 750,000 vehicles globally in February. Rubber demand sentiment has been mixed over recent months after China relaxed its strict COVID restrictions, which was immediately followed by a fresh wave of infections.
President Xi Jinping said on Wednesday he was particularly concerned about China’s COVID-19 wave spreading to rural areas with poor medical facilities but he urged perseverance in stressful times, saying “light is ahead.” US 10-year Treasury yields fell to a four-month low on Wednesday as data showed US retail sales declined more than expected in December.
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