SINGAPORE: Japanese rubber futures rose for a fifth consecutive session on Tuesday, buoyed by prospects of further policy stimulus in top consumer China.
Osaka Exchange’s rubber contract for February delivery finished 2.8 yen, or 1.2%, higher at 232 yen ($1.58) per kg. The rubber contract on the Shanghai futures exchange (SHFE) for January delivery fell 240 yuan to finish at 14,130 yuan ($1,931.35) per metric ton.
China stepped up measures to boost its faltering economy on Friday, with top banks paving the way for further cuts in lending rates and sources saying Beijing plans more action including relaxing home-purchase restrictions.
“Rubber remains stable, bolstered by speculative investments in the futures market and increasing buying activity in China,” a Singapore-based trader said. Japan’s benchmark Nikkei average closed up 0.3%. The yen fell to a one-week low and analysts see it grinding towards 150 per dollar unless there is a sharp change in the gap between Japanese yields, pegged near zero, and US yields comfortably above 4%. A dollar last bought 146.72 yen.
A weaker yen makes assets denominated by the currency more affordable for overseas buyers. Oil prices were mixed on Tuesday as data showing China’s economy was still struggling with a post-pandemic recovery offset expectations of an extension in supply cuts by leading OPEC+ members Saudi Arabia and Russia.
Higher crude prices prompts manufacturers to reduce consumption of synthetic rubber, which is derived from oil, and instead use more natural rubber.
Asian stocks fell on Tuesday as weak service sector data rekindled worries over China’s economy, while the Reserve Bank of Australia kept interest rates unchanged, as expected, for a third month in a row.
The front-month rubber contract on Singapore Exchange’s SICOM platform for September delivery last traded up 1.3% at 141.3 US cents per kg.
On Monday, Japanese rubber futures rose to their highest in 11 months as Beijing’s measures to revive the country’s economy underpinned the market.
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