SINGAPORE: Japanese rubber futures edged higher on Monday as stronger domestic equities boosted investor confidence while a persistently weak yen also supported sentiment, although weaker oil prices capped gains.
The Osaka Exchange (OSE) rubber contract for September delivery was up 0.2 yen, or 0.06%, at 311 yen ($2.01) per kg, as of 0145 GMT.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery was down 40 yuan, or 0.27%, at 14,535 yuan ($2,007.01) per metric ton.
“The 14-day RSI dropped to 39.7%, suggesting a bearish momentum. The expected trading range for the next week is between 300 and 325 (yen),” Japan Exchange Group said in a technical analysis of the OSE September contract in its weekly strategy report published on Monday.
Japan’s benchmark Nikkei average opened 0.47% higher.
The yen hit 154.66 per dollar, not far from last week’s 34-year low of 154.79.
Oil prices were dragged down by a renewed focus on market fundamentals, as Israel and Iran played down the risks of an escalation of hostilities in the Middle East after Israel’s apparently small strike on Iran.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Tesla has cut prices in a number of its major markets, as it grapples with falling sales and an intensifying price war for electric vehicles.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.4% from last Friday, the exchange said on Friday.
The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 162 U.S. cents per kg, up 0.12%.
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