SHANGHAI: Japanese rubber futures fell for a second day on Tuesday, hitting its lowest in more than two months although the Bank of Japan’s decision to maintain its ultra-loose monetary policy limited the decline.
The Osaka Exchange (OSE) rubber contract for May closed down 1.9 yen, or 0.81% lower, at 235.5 yen per kg, its lowest closing since Oct. 10. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was 75 yuan, or 0.56% higher, at 13,580 yuan per metric ton. Japan’s government upgraded its view on business sentiment for the first time in two months in December as a central bank survey showed broad recovery in the corporate mood thanks to upbeat profits.
The Bank of Japan maintained ultra-loose monetary settings on Tuesday in a widely expected move, underscoring policymakers’ preference to await more clues on whether wages will rise enough to keep inflation durably around its 2% target.
The US dollar was quoted around 144.53 yen, compared with around 142.74 yen on Monday. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
China’s property sector worsened in November as negative home buyer sentiment and indebted developers drove down sales and investment, while broader retail sector activity missed forecasts, suggesting more support is needed to shore up demand.
Oil steadied as investors considered the potential impact on oil supply from attacks by Yemen’s Iran-aligned Houthi against ships in the Red Sea, which have disrupted maritime trade and forced companies to reroute vessels.
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 January delivery last traded at 145 US cents per kg.
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