TOKYO: Japanese rubber futures edged higher on Wednesday, as investors looked for bargains after the previous session’s losses, though a stronger yen against the US dollar and fears over a global economic slowdown capped the gains.
The Osaka Exchange rubber contract for July delivery was up 0.2 yen, or 0.1%, at 226.7 yen ($1.7) per kg, as of 0255 GMT. It slid 0.8% on Tuesday.
Stronger oil prices also lent support. Oil prices rose on Wednesday, extending gains from the previous two days, on the weaker dollar and as US crude stocks surprisingly fell. The natural rubber market benefits from stronger oil prices that spur manufacturers to shift away from synthetic rubber, which is derived from oil, thus driving up prices of natural rubber.
The dollar fell to around 131.25 yen from around 132.26 yen on Tuesday afternoon in Asia, after Federal Reserve Chair Jerome Powell failed to offer fresh signs of a hawkish pushback against the resilient labour market, leading investors to bet that interest rates may not rise much further. A stronger yen reduces the value of yen-based rubber in a dollar base and normally encourages investors to sell rubber futures at OSE.
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