SINGAPORE: Japanese rubber futures tracked Shanghai market lower on Thursday, as traders craved for more concrete and substantial stimulus measures from China, although gains in crude and a weaker yen limited losses.
The Osaka Exchange (OSE) rubber contract for January delivery was down 0.1 yen, or 0.1%, at 197.9 yen ($1.38) per kg, as of 0212 GMT. The benchmark contract hovered near a two-year low since July 18. The rubber contract on the Shanghai futures exchange (SHFE) for September delivery was down 160 yuan, or 1.3%, at 12,015 yuan ($1,672.05) per metric ton, set for a third straight day of losses. Japan’s benchmark Nikkei average opened 1.01% lower. China and Hong Kong stocks pulled back on Wednesday after a recent rally that was spurred by stimulus hopes as some investors booked profits in the absence of concrete and forceful measures by Beijing to shore up a flagging economy. Still, the yen softened 0.42% against the dollar to 142.74 in the previous session, making yen-dominated assets more affordable for overseas buyers.
Oil prices rose slightly in early Asian trading, as markets weighed bullish US inventory data and a likely extension of OPEC+ output cuts against the fallout of Fitch’s downgrade of the US government’s top credit. Higher oil prices incentivise manufacturers to shift away from rival synthetic rubber, derived from oil, helping the natural rubber market.
Asian shares were subdued on Thursday after Fitch downgraded US sovereign debt sparking profit-taking following a strong July, with investors shifting focus to Bank of England’s rate decision and earnings from Apple and Amazon. The front-month rubber contract on Singapore Exchange’s SICOM platform for September delivery last traded at 128.8 US cents per kg, down 0.8%.
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