TOKYO: Japanese rubber futures rose to a two-week high on Thursday, as concerns that heavy rain was slowing production in Southeast Asia’s key producing countries spurred buying.
The Osaka Exchange (OSE) rubber contract for December delivery finished 3.2 yen, or 0.8 percent, higher at 421.9 yen (USD2.6) per kg, its highest close since June 25.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 15 yuan to settle at 16,920 yuan (USD2,490) per metric ton.
Rubber crops usually undergo a season of low production from February to May, before a peak harvesting period that lasts until September.
“Although this is typically the season when production rises, heavy rain has slowed output in producing regions in Southeast Asia, lifting physical prices and, in turn, futures,” a Tokyo-based dealer said. “If physical output begins to pick up, downward pressure on futures market is likely to intensify.”
Oil prices fell on Thursday, erasing earlier gains, as markets assessed the impact of fresh US strikes on Iran, which could hinder progress on talks to end their war and allow for the full reopening of the key Strait of Hormuz.
Natural rubber often tracks oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
The yen traded at around 162.30 against the US dollar, hovering near the strongest level in a week.
A stronger currency makes yen-denominated assets more expensive to overseas buyers.
Japan’s Nikkei share average snapped a three-day losing streak, as AI-related shares tracked gains in US peers.
Meanwhile, China car sales fell for a ninth consecutive month in June, as automakers increasingly turn to export markets to cushion the impact of sluggish local demand.
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