SINGAPORE: Japanese rubber futures slid on Thursday, hit by a jittery oil market and concerns over ongoing war in Ukraine, while high February inflation numbers also weighed on sentiment.
The Osaka Exchange rubber contract for August delivery finished 2.0 yen, or 0.8%, lower at 245.5 yen ($2.12) per kg.
Oil prices rose in volatile trade following a sharp drop in the previous session as the market contemplated whether major producers would boost supply to help plug the gap in output from Russia due to sanctions for its invasion of Ukraine.
Oil prices retreated from Wednesday’s highs, so rubber prices may have followed accordingly, a Singapore-based trader said.
The ongoing Ukraine war is also continuing to affect traders’ risk appetite, he added.
Russia’s war in Ukraine entered the third week, with none of its stated objectives reached despite thousands of people killed, more than two million made refugees, and thousands forced to cower in besieged cities under relentless bombardment.
An oil-driven inflation shock triggered by the war in Ukraine is forcing Asia’s policymakers to rethink their assumptions for 2022, with the risks of weak growth coupled with surging prices adding unwanted complexity to monetary setting plans.
Japan’s wholesale inflation accelerated in February at the fastest pace in roughly four decades on rising fuel costs, a sign inflationary pressures were building up even before the Ukraine crisis triggered a broad-based surge in commodity prices.