SINGAPORE: Japanese rubber futures edged lower on Monday, hit by a strengthening yen and falling oil prices. The Osaka Exchange (OSE) rubber contract for August delivery was down 3.8 yen, or 1.7%, at 226 yen (1.66) per kg as of 0207 GMT.
The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was down 165 yuan, or 1.3%, at 12,440 yuan ($1,799.23) per tonne.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange inched 0.4% higher from a week earlier, the exchange said on Friday. Japan’s benchmark Nikkei share average opened up 0.91%.
The Japanese yen strengthened 0.04% to 135.83 per dollar. A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
Oil prices opened lower, after China set a modest target for economic growth this year of around 5%, lower than market expectations of 5.5% growth in the world’s second-largest oil consumer.
Lower oil prices incentivise manufacturers to shift to synthetic rubber derived from oil, hindering the natural rubber market. Still, Asian shares edged up, while bond markets held their breath ahead of an update on the US rate outlook from the world’s most powerful central banker.
There was some disappointment that Beijing chose to lowball its growth outlook with a target of 5%, rather than the 5.5%-plus favoured by the market, but the recent run of actual data has been strong enough to keep investors optimistic.The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last traded at 139.10 US cents per kg, down 1.6%.