SINGAPORE: Japanese rubber futures ended lower on Wednesday, contrary to an upbeat Shanghai and Singapore market, as traders re-evaluated their positions after weighing concerns of excess global supply. Osaka Exchange’s rubber contract for November delivery finished down 0.8 yen, or 0.4%, at 209.7 yen ($1.50) per kg, retreating from gains made earlier in the session. The rubber contract on the Shanghai futures exchange for September delivery rose 180 yuan to finish at 12,085 yuan ($1,686.41) per metric ton.
Japan’s benchmark Nikkei average advanced 1.47%, closing at its highest since March 1990. Technical analysis projects a climb in SHFE futures, but they will likely consolidate between 11,665 and 12,415, given high inventory and increased availability of raw materials for final goods, said a Singapore-based trader.
China’s central bank lowered a short-term lending rate for the first time in 10 months, to help restore market confidence and prop up a stalling post-pandemic recovery in the world’s second-largest economy. Still, data released later on Tuesday showed China’s credit growth slowed sharply in May and new bank lending rose less than expected in the latest sign of economic slowdown, fuelling expectations that further stimulus measures will follow.
The yen strengthened 0.19% against the dollar to 139.97, making yen-denominated assets less affordable when purchased in other currencies. Asian shares struggled for traction and the dollar was subdued as the market focuses on the probability of a less aggressive Federal Reserve at its policy meeting which concludes on Wednesday.
The front-month rubber contract on Singapore Exchange’s SICOM platform for July delivery last traded at 133.7 US cents per kg, up 1.1%.
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