SINGAPORE: Japanese rubber futures rallied for a sixth straight session on Wednesday, supported by a surge in crude oil prices and a weak yen.
The Osaka Exchange’s rubber contract for February delivery finished 2.0 yen, or 0.9%, higher at 234 yen ($1.59) per kg. The rubber contract on the Shanghai futures exchange (SHFE) for January delivery was up 15 yuan, or 0.1%, at 14,175 yuan ($1,940.27) per metric ton.
The yen strengthened 0.19% against the dollar, but was near the lowest since Nov. 4 it touched earlier in the session. The Asian currency has hovered around the key 145 per-dollar level for the past few weeks, leading traders to keep a wary eye on signs of intervention by Tokyo.
Japanese equities closed at new highs, with the weakest yen rate since November boosting automakers, while energy shares outperformed amid a surge in crude oil prices.
A weaker yen makes assets denominated by the currency more affordable for overseas buyers holding other currencies. Oil prices ticked up after rising more than 1% in the previous session, as markets worried about a supply shortage after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year.
High crude prices prompt manufacturers to reduce consumption of synthetic rubber, which is derived from oil, and switch to natural rubber. Asia stocks fell after faltering growth in China and Europe heightened concerns about global economic momentum, while the dollar firmed as investors weighed the outlook for Federal Reserve interest rates.
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