Japanese rubber futures post best week in nearly 2 years on softer yen

SINGAPORE: Japanese rubber futures spiked on Friday to their highest levels since early June and recorded their best week since November 2021, as a softer yen made the commodity more affordable for overseas buyers.

Osaka Exchange’s rubber contract for January delivery finished 4.2 yen, or 2%, higher at 212.4 yen ($1.45) per kg.

The benchmark contract peaked at 218.6 yen per kg earlier in the session and gained 6.95% for the week.

The rubber contract on the Shanghai futures exchange for January delivery rose 60 yuan to finish at 13,270 yuan ($1,821.05) per metric ton.

Japan’s benchmark Nikkei average closed 2.05% lower.

The yen weakened 0.14% to 146.08 per dollar as the Asian currency straddled the level at which Japanese authorities intervened last year, keeping traders on their toes looking for signs of similar moves this time.

Japan’s threshold for currency market intervention on the yen is likely to be around 150 per dollar, JP Morgan analysts and ex-BOJ official Atsushi Takeuchi said.

“The rubber spot market saw support this week amid improved buying capacity triggered by some weakness in the US dollar,” said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company.

“On the raw material front, the situation was mixed: where Thailand saw some reports of rain, while Indonesian raw material saw some correction.” Still, overall economic cues continue to be weak and cautiousness in China’s property sector could extend into other areas of spending including automotives, Miller added.

Asian stocks sold off and the dollar scaled an 11-week peak against major peers on Friday as investors braced for the risk of a hawkish tilt from Federal Reserve Chair Jerome Powell at Jackson Hole.

The front-month rubber contract on Singapore Exchange’s SICOM platform for September delivery last traded at 132.2 US cents per kg, up 0.8%.