SINGAPORE: Japanese rubber futures snapped a three-session rally on Tuesday, as weak data from China’s industrial sector dampened investor risk appetite, while a firmer yen also dragged down prices. The Osaka Exchange (OSE) rubber contract for November delivery was down 0.6 yen, or 0.3%, at 210.1 yen ($1.56) per kg, as of 0152 GMT.
The rubber contract on the Shanghai futures exchange (SHFE) for September delivery was up 15 yuan, or 0.1%, at 11,910 yuan ($1,723.07) per tonne. Japan’s benchmark Nikkei average opened 0.12% lower. China’s factory activity likely contracted further in May, a Reuters poll showed on Monday, adding to pressures facing the world’s second-biggest economy amid an uneven economic recovery from the COVID-19 pandemic.
The official manufacturing PMI and a survey for the services sector will be released on Wednesday. Likewise, profits at China’s industrial firms slumped in the first four months of 2023, official data showed on Saturday.
Mitsubishi Motors Corp will extend a suspension of its production in China beyond May, the Yomiuri newspaper reported on Tuesday, highlighting struggles Japanese car makers face in the world’s largest auto market. The Japanese yen strengthened 0.26% against the dollar to 140.08, making yen-dominated assets less affordable when purchased in other currencies. Rubber output may be affected in top-exporter Thailand as the southwesterly monsoon approaches. The National Water Command Centre (NWCC) issued flash flood warnings for some provinces in all regions from Saturday until Thursday (May 27 to June 1).
Asian markets were trading mostly in positive territory on Tuesday as investors applauded the prospect the US will avert a major debt default by June 5 which improved sentiment across most major asset classes.
The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 133.2 US cents per kg, down 0.2%.
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