SINGAPORE: Japanese rubber futures ended higher on Thursday, recovering from losses earlier in the session on hopes of Chinese stimulus, although concerns about its lasting impact without significant fiscal intervention and bleak economic outlook capped gains.
Osaka Exchange’s rubber contract for December delivery finished 0.4 yen, or 0.2%, higher at 203.3 yen ($1.46) per kg, but still hovered around a near two-year low touched on Tuesday.
The rubber contract on the Shanghai futures exchange for September delivery rose 80 yuan to finish at 12,260 yuan ($1,706.55) per metric ton. * Japan’s benchmark Nikkei average closed down 1.23%.
“Recent headlines from China about backing the private sector, promoting consumption and Kissinger’s Beijing visit do project a positive image,” a Singapore-based trader said. “However, without significant fiscal stimulus, I feel it’s a dead cat bounce. The lingering sluggishness in the property market could continue to strain the economy and household finances,” they added.
Japan’s annual exports grew much less than expected in June, highlighting weak global demand that continues to undercut the post-COVID recovery in the world’s third-biggest economy. The government also cut this year’s economic growth forecast but expects inflation to sharply exceed the central bank’s 2% target in new projections released on Thursday, acknowledging growing signs of change in the country’s deflationary mindset.
Ivory Coast exported 649,119 tonnes of natural rubber from January to June, up 0.3% from the same period last year, provisional port data showed on Wednesday, putting a lid on rubber prices.
Asian shares inched higher on Thursday as investors took stock of corporate earnings and looked ahead to central bank meetings next week, while disappointing earnings results from Netflix and Tesla pushed US futures lower. The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 129.0 US cents per kg, up 0.4%.
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