SINGAPORE: Japanese rubber futures extended losses to a third consecutive session on Tuesday, with the market hitting a more than seven-month low, as a firmer yen and renewed concerns over slowing demand in top consumer China weighed on sentiment.
Osaka Exchange’s rubber contract for January delivery finished 5.3 yen, or 2.3%, lower at 227.0 yen ($1.74) per kg, its lowest point since late December.
The rubber contract on the Shanghai futures exchange for September delivery fell 140 yuan to finish at 12,075 yuan ($1,785) per tonne.
“The markets are reacting negatively as the yen continues to strengthen and the SHFE continues to edge down on yesterday’s weak manufacturing data painting a disappointing demand outlook,” said a Singapore-based trader.
“Obviously, brewing tensions as a result of Speaker Pelosi’s (planned) trip to Taiwan hasn’t helped sentiment either,” he added.
The dollar traded at 130.78 yen, hitting its lowest since June 6 and down 4% in the last four sessions, denoting a firmer yen that makes yen-denominated assets less affordable when purchased in other currencies, limiting demand.
In China, a private poll by Caixin on Monday showed manufacturing activity grew more slowly than expected in July, after a bearish official survey on Sunday indicated the sector actually contracted last month.
Mainland China’s Health Commission reported 498 new coronavirus cases for Aug. 1, compared with 393 new cases a day earlier.
Asia stocks tumbled on Tuesday as jitters about an escalation in Sino-US tension with US House of Representatives Speaker Nancy Pelosi set to begin a trip to Taiwan, adding to fears about the risk of global recession.
The front-month rubber contract on Singapore Exchange’s SICOM platform for September delivery last traded at 152.1 US cents per kg, down 0.6%.
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