SINGAPORE: Japanese rubber futures rose on Thursday on the back of a Weaker yen, although gains were capped by lower oil prices. The Osaka Exchange (OSE) rubber contract for December Delivery was up 1.1 yen, or 0.33%, at 332.6 yen ($2.07) per kg as of 0704 GMT. The September rubber contract on the Shanghai Futures Exchange (SHFE) fell 125 yuan to 14,925 yuan ($2,053.35) per metric ton. The yen languished near a 38-year low and struggled on the weaker side of 160 per dollar, keeping markets on alert for any signs of intervention from Japanese authorities to prop up the currency.
Japanese authorities will take necessary actions on currencies, Finance Minister Shunichi Suzuki said, signalling readiness to intervene in the exchange-rate market after the yen’s slide. A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers holding other currencies.
Oil prices dipped as a surprise build in US stockpiles fuelled fears about slow demand from the world’s top oil consumer, though declines were capped by worries a potential expansion of the Gaza war may disrupt Middle East supplies.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Top consumer China’s industrial profits rose at a sharply slower pace in May, official data showed, underlining the struggles faced by the world’s second-largest economy as weak domestic demand crimps overall growth.
China’s manufacturing activity likely contracted for a second month in June, a Reuters poll showed, keeping alive calls for fresh stimulus after a string of recent indicators showed the economy struggling to get back on its feet.
The front-month July rubber contract on Singapore Exchange’s SICOM platform last traded at 165.2 US cents per kg, down 2.5%.
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