SINGAPORE: Japanese rubber futures bounced back on Wednesday, closing at its highest in almost three months as traders hoped for a stimulus from China amid a slew of disappointing data.
Osaka Exchange’s rubber contract for November delivery finished 3.6 yen, or 1.7%, higher at 214.2 yen ($1.54) per kg, its best day in more than three weeks.
The rubber contract on the Shanghai futures exchange for September delivery rose 230 yuan to finish at 12,085 yuan ($1,695.85) per tonne. Japan’s benchmark Nikkei average closed 1.82% lower.
The market is betting on a stimulus from China’s central government in light of recent poor economic indicators, but the uptick might be short-lived as traders remained cautious about imminent oversupply in the short-run, said a Singapore-based trader.
China’s exports shrank much faster than expected in May and imports fell, albeit at a slower pace, as manufacturers struggled to find demand abroad and domestic consumption remained sluggish.
Earlier last week, China’s official purchasing managers’ index (PMI) showed factory activity shrank faster than expected in May, while profit at China’s industrial firms slumped in the first four months of 2023. Still, the World Bank on Tuesday raised its 2023 global growth outlook as the US, China and other major economies proved more resilient than forecast, but said higher interest rates and tighter credit will take a bigger toll on next year’s results.
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