SINGAPORE: Japanese rubber futures opened on a tepid note on Wednesday, as the yen pared its strength from the previous session and oil prices rose, although traders remain concerned about projections of lacklustre economic growth.
The Osaka Exchange (OSE) rubber contract for September delivery was down 0.2 yen, or 0.1%, at 209.8 yen ($1.59) per kg, as of 0211 GMT. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was down 40 yuan, or 0.3%, at 11,875 yuan ($1,725.09) per tonne. Japan’s benchmark Nikkei average opened 0.11% higher. Average potential global economic growth will slump to a three-decade low of 2.2% per year through 2030, ushering in a “lost decade” for the world’s economy, unless policymakers adopt ambitious initiatives to boost labour supply, productivity and investment, the World Bank warned on Monday. The Japanese yen weakened 0.57% to 131.61 per dollar, as of 0213 GMT, undoing most of its jump from the previous session. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
Similarly, crude prices rose for a third day in early Asian trade on Wednesday as a halt to some exports from Iraqi Kurdistan raised concerns of tightening supply and market sentiment improved as fears of a banking crisis eased. Higher oil prices help the natural rubber market as manufacturers are incentivised to shift away from rival synthetic rubber derived from oil. Asian shares rose sharply on Wednesday while the dollar was on the defensive as easing concerns over the banking sector revived risk appetite, while Alibaba’s stock soared on the internet behemoth’s plans to split into six units. The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last opened flat at 133.4 US cents per kg.—Reuters
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