SINGAPORE: Japanese rubber futures fell on Friday as the yen languished slightly above the threshold of 150 to the US dollar, though firmer crude prices limited losses.

The Osaka Exchange (OSE) rubber contract for April delivery was down 2.9 yen, or 1.1%, and traded at 258.8 yen ($1.72) per kg at closing. The benchmark contract posted 0.4% weekly declines after two consecutive weeks of gain.

The rubber contract on the Shanghai futures exchange (SHFE) for January delivery was down 150 yuan, or 1%, at 14,480 yuan ($1,979.03) per metric ton. The Japanese yen strengthened 0.1% against the dollar, but stayed slightly above 150 per dollar, a threshold which some see as a potential trigger for intervention by Japanese authorities. The yen last traded at 150.22 per dollar, recovering slightly from the previous session’s one-year trough of 150.78. Core consumer inflation in Japan’s capital Tokyo, considered a leading indicator of nationwide trends, unexpectedly accelerated in October, a sign of broadening price pressures that may keep alive expectations of near-term end to ultra-low interest rates. Japan’s benchmark Nikkei average closed 1.27% higher. Oil prices rose by over $1 on Friday as reports that the US military struck Iranian targets in Syria raised concerns of a widening of the Israel-Hamas conflict that could impact supply from the key Middle East producing region.

Natural rubber often takes direction from oil prices, as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded 1.5% lower at 144.2 US cents per kg.


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