TOKYO: Japanese rubber futures rebounded on Monday from a two-month low hit last week, with a weaker yen prompting fresh buying while consumer prices data from top buyer China boosted hopes for more government stimulus. The Osaka Exchange (OSE) rubber contract for May delivery finished 5.0 yen, or 2.1%, higher at 242.5 yen ($1.7) per kg. The benchmark lost 7.5% last week for its worst week in two-and-a-half years.
The Shanghai futures exchange (SHFE) rubber contract for January delivery rose 110 yuan to finish at 13,565 yuan ($1,889) per metric ton. “OSE prices gained support from a weaker yen against the US dollar,” said Jiong Gu, analyst at Yutaka Trusty Securities, adding that support also came from investor expectations of further economic stimulus from Beijing. The US dollar was quoted around 146.42 yen, compared with around 143.91 yen on Friday afternoon.
A weaker yen makes yen-denominated assets more affordable when purchased in other currencies. Japan’s benchmark Nikkei average closed 1.5% up after the yen pulled back from a four-month peak and Wall Street rallied on rising bets of a soft landing for the US economy.
China’s consumer prices fell the fastest in three years in November while factory gate deflation deepened as weak domestic demand casts doubt over the economic recovery. Markets are awaiting more government stimulus at the agenda-setting “Central Economic Work Conference” this month.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 8.3% from a week earlier, the exchange said on Friday. The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 143.4 US cents per kg, down 0.6%.
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