SINGAPORE: Japanese rubber futures inched higher on Friday, underpinned by a softer yen after the Bank of Japan (BOJ) announced it would keep rates ultra-low, although mixed signals on China’s recovery and recession concerns capped gains. Osaka Exchange’s rubber contract for October delivery finished 1.0 yen, or 0.5%, higher at 208.7 yen ($1.55) per kg.
The benchmark contract posted its first weekly drop in three, down 0.7% for the week, and its third monthly decline, contracting about 0.6%. The rubber contract on the Shanghai futures exchange (SHFE) for September delivery fell 80 yuan to finish at 11,770 yuan ($1,701.56) per tonne.
The Shanghai market will be closed from April 29 to May 3 for the holidays. Trading will resume on Thursday, May 4. Japan’s benchmark Nikkei average closed 1.40% higher.
Earlier this week, the futures market saw a surge on Tuesday, but then corrected on mixed signals from China and recession fears, said Farah Miller, chief executive officer of Helixtap Technologies, an independent rubber-focused data company. Data overnight showed the US economy slowed more than expected in the first quarter, even as price growth came in hotter than economists had projected.
Core consumer inflation in Tokyo beat expectations in April and an index stripping away fuel costs rose at the fastest pace in four decades. The Japanese yen fell 1.32% against the dollar to 135.71 as of 0704 GMT, making yen-dominated assets more affordable when purchased in other currencies.
Asian stocks rose on Friday as strong corporate earnings lifted sentiment despite lingering worries over economic weakness, while the yen dipped after the Bank of Japan kept rates ultra-low even as it announced a broad review of monetary policy. The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 133.4 US cents per kg.
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