SINGAPORE: Japanese rubber futures advanced for the second straight session on Monday, buoyed by a softer yen and optimism surrounding China’s manufacturing sector, while traders focused on weather conditions in top producer Thailand.
The Osaka Exchange (OSE) rubber contract for June delivery closed up 3.9 yen, or 1.05%, at 374.5 yen ($2.37) per kg. Japan’s financial markets will be closed from Dec. 31 to Jan. 3 for holidays. Trading will resume on Jan. 6. The May rubber contract on the Shanghai Futures Exchange (SHFE) rose 285 yuan, or 1.62%, to finish at 17,885 yuan ($2,450.30) per metric ton. The yen traded around five-month lows against a dollar underpinned by rising US yields, changing hands at 157.82 with only the risk of Japanese intervention preventing another test of the 160 level last seen in July.
A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. China’s factory activity likely expanded for a third straight month in December, a Reuters poll showed, offering a glimmer of optimism to officials trying to steady the world’s No. 2 economy as they brace for further US trade tariffs under a second Trump administration.
Meanwhile, official data on Friday showed that the country’s industrial profits fell at a slower clip in November, but the annual decline in earnings this year is expected to be the worst in over two decades due to persistently soft domestic consumption. China is the world’s largest consumer of rubber.
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