SINGAPORE: Japanese rubber futures extended a rally to hit its highest in more than three months on Thursday, as demand sentiment remains high over hopes of an economic recovery in top buyer China despite holiday-thinned trade in the country.
The Osaka Exchange rubber contract for July delivery was up 0.8 yen, or 0.3%, at 225.8 yen ($1.75) per kg as of 0200 GMT, hitting its highest since Oct. 11.
The OSE’s January contract expired at 218.0 yen per kg on Wednesday. China’s financial markets will be closed for a week for the Lunar New Year holiday, which officially started Jan. 21. The markets will resume trading on Monday, Jan. 30.
Japan’s benchmark Nikkei share average opened up 0.18%. Rubber demand sentiment has been positive lately following China’s relaxation of its strict COVID-19 curbs which had been dampening consumption and industrial activity since the start of the pandemic.
Critically ill COVID-19 cases in China are down 72% from a peak early this month while daily deaths among COVID-19 patients in hospitals have dropped 79% from their peak, the Center for Disease Control and Prevention said on Wednesday.
Japan cut its view on the overall economy for the first time in 11 months in January, as China’s COVID-19 infections and a slowdown in global demand for tech and semiconductors hurt exports, especially to Asia.
Global equity markets skidded on Wednesday as poor corporate results fuelled recession fears, as did the ongoing inversion of short- and long-dated Treasury yields - a harbinger of economic downturns. The front-month rubber contract on Singapore Exchange’s SICOM platform for February delivery last traded at 146.1 US cents per kg, up 0.1%.
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