SINGAPORE: Japanese rubber futures closed higher on Friday, helped by a weakening yen and positive sentiment after the China’s Chinese economic stimulus.
The Osaka Exchange (OSE) rubber contract for March delivery closed up 1 yen, or 0.26%, at 392 yen per kg. The contract gained 6.9% for the week. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery closed up 75 yuan, or 0.41%, at 18,555 yuan per metric ton.
China’s central bank lowered interest rates and injected liquidity into the banking system, attempting to pull economic growth back towards this year’s roughly 5% target. That helped Chinese stocks raced toward their best week since 2008 and lifted Asian shares to 2-1/2-year highs.
The yen fell more than 1% to 146.495, its lowest since Sept. 3, with markets bracing for the victory of hardline nationalist Sanae Takaichi, a vocal opponent of further rate hikes. A weaker currency makes yen-denominated assets more affordable to overseas buyers. The most active November butadiene rubber contract on the SHFE closed down 210 yuan, or 1.32%, at 15,700 yuan per metric ton.
Top rubber producer Thailand’s meteorological agency warned of heavy to very heavy rains that may cause flash floods from Sept. 27 to Oct. 3. Oil prices recouped losses to edge higher as investors weighed up expectations of increased output from Libya and the broader OPEC+ group against China’s stimulus plan.
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 the Singapore Exchange’s SICOM platform for October delivery last traded at 200.4 US cents per kg, down 1.1%.
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