TOKYO: Japanese rubber futures rose on Friday as the yen’s weakness against the U.S. dollar lent support, though concerns over slow demand in top buyer China due to recent COVID outbreaks limited gains.
The Osaka Exchange rubber contract for September delivery finished 1.5 yen, or 0.6%, higher at 265.5 yen ($2.1) per kg. It marked its fifth straight weekly gain, the longest winning streak since last October.
The rubber contract on the Shanghai futures exchange for September delivery fell 90 yuan to finish at 13,340 yuan ($2,094) per tonne.
The dollar rose to a two-decade peak against the yen, as more hawkish comments from Federal Reserve officials reinforced expectations for faster U.S. policy tightening.
A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
“On top of the yen’s drop, higher raw material costs boosted OSE prices,” a Tokyo-based dealer said.
“On the other hand, Shanghai futures were under pressure as investors were worried about slumping demand amid the prolonged pandemic and lockdown in the town,” he said.
Shanghai posted a slight decline in new infections on Friday as the lockdown in the commercial capital at the centre of China’s COVID-19 outbreak, coupled with curbs elsewhere, threatens to take a heavier toll on the world’s second-biggest economy.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.8% from last Friday, the exchange said on Friday.
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