SINGAPORE: Japanese rubber futures rose on Wednesday to their highest in more than two weeks, helped by weakness of the yen against the U.S. dollar, while stronger Asian stocks and firm oil prices also provided support.
The Osaka Exchange rubber contract for August delivery finished 0.7 yen, or 0.3%, higher at 252.5 yen ($2.09) per kg, after touching the highest since March 7 of 254.7 yen earlier in the session.
The weakening yen was a significant factor that led to higher OSE rubber prices, said a Singapore-based trader.
He added that OSE prices were also supported by high physical rubber prices and a tight raw material supply in Thailand.
The dollar traded at 120.91 yen against 120.31 yen on Tuesday afternoon in Asia. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
Asian equities hit three week highs on Wednesday as investors fled a meltdown in bond markets and sought refuge in cash, carry trades and beaten-down sectors such as technology, while the Ukraine conflict’s threat to supplies kept oil prices firm.
Japan’s benchmark Nikkei share average rose 3.0% on Wednesday, ending at its highest since Jan. 18 and posting a seventh straight session of gains, the longest winning streak since September 2021.
Oil prices rose on Wednesday as a reported drop in U.S. crude inventories increased concerns about tight global supplies amid the hit to Russian exports from economic sanctions.
The rubber contract on the Shanghai futures exchange for May delivery SNRv1 was down 90 yuan to finish at 13,360 yuan ($2,096.08) per tonne.
Authorities in the Chinese city of Shanghai have denied rumours of a city-wide lockdown after a sixth straight increase in daily asymptomatic coronavirus cases pushed its count to record levels despite a campaign of mass testing aimed at stifling the spread. Geely Automobile Holdings Ltd expects rising raw material prices and global chip shortages to pressure its profitability and sales this year, the Chinese company said on Wednesday, after posting a 12% fall in 2021 profit.