Japanese rubber futures snap six-session losing streak on softer yen

SINGAPORE: Japanese rubber futures snapped a six-session losing streak on Monday, as a weaker yen made the commodity more affordable to overseas buyers.

The Osaka Exchange (OSE) rubber contract for March delivery rose 7.3 yen, or 2.45 percent, to 305 yen (USD2.03) per kg. The yen tumbled 1.9percent against the dollar to 150.35, marking its biggest one-day percentage drop in five months, after Sanae Takaichi won the LDP leadership election, setting the country on course for more expansionary fiscal policy. Japan’s Nikkei gained as much as 4.3percent to an all-time high. Oil prices rose about 1percent after a lower-than-expected OPEC+ output hike.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Trading activity was subdued last week, with prices moving in a narrow range due to muted sentiment and the absence of Chinese players due to the Chinese National Day holiday, the Japan Exchange Group said on Monday.

Top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from October 6-8.

China’s Chery is in talks with several South African automakers about sharing manufacturing plants to produce its vehicles. Automobile sales could influence the intensity of vehicle manufacturing, which involves using rubber-made tyres. The front-month rubber contract on the Singapore Exchange’s SICOM platform for November delivery last traded at 171.3 US cents per kg, up 0.2 percent.