SINGAPORE: Japanese rubber futures dipped on Thursday after a six-day winning streak, dragged lower by a sluggish Chinese economy and falling oil prices.
Osaka Exchange’s rubber contract for February delivery finished 4.2 yen, or 1.8%, lower at 229.8 yen ($1.56) per kg. The rubber contract on the Shanghai futures exchange for January delivery fell 30 yuan to finish at 14,195 yuan ($1,938.02) per metric ton.
Despite a series of policy measures in recent months to revive China’s stumbling economy, policymakers expect persistently slower growth. “Funds in China that entered the speculation are running or taking profit.
However, not all of them are liquidating as of now,” said a Singapore-based trader. Policymakers in Tokyo believe China’s deepening economic woes could hit Japan’s fragile recovery, especially if Beijing fails to shore up demand with meaningful stimulus. Japan’s benchmark Nikkei average closed down 0.75%.
The fragile yen continued to struggle to make headway against the resilient dollar, making yen-denominated assets more affordable for overseas buyers. The yen last traded at 147.66 per dollar.
Oil prices eased on Thursday as worries over demand due to a seasonal slowdown during winter and an uncertain economic outlook for China outweighed expectations of tighter supplies from extended production cuts in Saudi Arabia and Russia.
Higher crude prices prompt manufacturers to reduce consumption of synthetic rubber, which is derived from oil, and instead use more natural rubber.
Asian stocks sank on Thursday, extending global equity declines, after new signs of sustained inflationary pressures in the United States boosted the case for elevated interest rates for longer.
The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 144.6 US cents per kg, up 1.1%.
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