SINGAPORE: Japanese rubber futures fell on Friday, but logged their largest weekly gain in around four months as investors cheered the trade war truce between the United States and top rubber consumer China, outweighing a firmer yen.
The Osaka Exchange (OSE) rubber contract for October delivery ended daytime trade down 3.3 yen, or 1.04%, at 313.4 yen ($2.16) per kg. The contract gained 4.05% this week, its biggest weekly rise since January 14.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 235 yuan, or 1.55%, to 14,905 yuan ($2,070.08) per metric ton. The most active June butadiene rubber contract on the SHFE lost 150 yuan, or 1.22%, to 12,160 yuan ($1,688.84) per metric ton.
Prices climbed earlier in the week after the US and China agreed to a 90-day pause on their trade war, during which both countries would sharply lower trade duties.
Oil prices headed for a second consecutive weekly gain due to easing US-China trade tensions. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Still, a pullback in rubber prices reflects market uncertainty, as investors are unsure how policies will evolve after the 90-day truce, said Chinese financial information site Tonghuashun Information. Meanwhile, the dollar was down 0.33% against the yen at 145.30.
A stronger currency makes yen-denominated assets less affordable to overseas buyers. Top producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods from May 21-22. The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 173.7 US cents per kg, down 1%.
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