Japanese rubber gains on softer yen

SINGAPORE: Japanese rubber futures recovered on Tuesday, after their worst day in almost a month, supported by a weaker yen, although Shanghai rubber extended declines on a slew of disappointing economic data.

Osaka Exchange’s rubber contract for January delivery finished 0.4 yen, or 0.2%, higher at 195.2 yen ($1.34) per kg. The benchmark contract earlier looked poised to slip to a three-year trough after briefly touching the 194.5 yen per kg threshold. The rubber contract on the Shanghai futures exchange for January delivery fell 70 yuan to finish at 12,805 yuan ($1,759.05) per metric ton. Japan’s benchmark Nikkei average closed up 0.56%.

Earlier, the yen hit a fresh nine-month low of 145.60 yen against the dollar, making yen-dominated assets more affordable for overseas buyers. The Japanese economy expanded for a third straight quarter in April-June, as brisk auto exports and tourist arrivals helped offset the drag from a slowing post-COVID recovery in consumption, although global recession prospects cloud the outlook.

Still, a broad array of Chinese data on Tuesday showed the economy slowed further last month, underscoring the faltering growth and prompting authorities to cut key policy rates to shore up activity.

“Without a clear understanding of these dynamics, it is difficult to anticipate any large-scale stimulus at this time.”