SINGAPORE: Japanese rubber futures staged a recovery and rebounded on Wednesday, supported by encouraging economic data from China and the potential for improved US-China trade relations, though the subdued Japanese economy limited the gains.
The Osaka Exchange (OSE) rubber contract for April delivery was up 0.6 yen, or 0.2%, at 270.4 yen ($1.79) per kg at closing. The rubber contract on the Shanghai futures exchange (SHFE) for January delivery was up 75 yuan, or 0.5%, at 14,490 yuan ($2,001.55) per metric ton. China’s industrial output and retail sales growth beat expectations in October, but economic landscape revealed significant weaknesses, particularly with the crisis-hit property sector hindering a complete recovery.
Japan’s economy contracted in July-September, snapping two straight quarters of expansion on soft consumption and exports. The dollar’s overnight drop brought some relief to the languishing Japanese yen, which eased off Monday’s one-year low of 151.92.
The yen last traded at 150.60 against the dollar. Japan’s benchmark Nikkei average closed 2.52% higher. US President Joe Biden and China President Xi Jinping will meet later in the day on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, seeking to reduce friction between both the countries.
Traders see this as a favourable indication of China’s willingness to engage in international business, instilling a renewed sense of optimism in the markets this week. Electric vehicle sales are seeing continued strength globally with China reporting record monthly sales in October, according to market research firm Rho Motion.
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