Japanese rubber futures track Shanghai drop amid fears over US-China tariff war

TOKYO: Japanese rubber futures fell on Monday, tracking a decline in Shanghai futures, weighed by concerns over the US-China tariff war, while a stronger yen also prompted fresh selling.

The Osaka Exchange (OSE) rubber contract for October delivery finished 1.7 yen, or 0.5%, lower at 318.3 yen ($2.2) per kg. The contract climbed 2.1% last week, logging its fourth consecutive weekly gain. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery dropped 330 yuan to settle at 14,400 yuan ($2,005) per metric ton.

“The OSE followed a sell-off in Shanghai, driven by uncertainty over the future of tariff negotiations between the US and China,” said Jiong Gu, an analyst at Yutaka Trusty Securities.

“As the market had been on an upward trend for the past few weeks, some profit-taking also kicked in for adjustment,” he said. But the downside was limited due to supply concerns caused by bad weather in Thailand, he added.

Thailand’s meteorological agency warned of heavy rain and accumulation that may cause flash floods during May 26-27.

China is weighing new policy tools in the face of an international economic and trade order that is “under severe impact,” Chinese Premier Li Qiang told a symposium with Chinese firms in Jakarta over the weekend.

Japanese Prime Minister Shigeru Ishiba on Sunday said Tokyo aims to advance tariff talks with the United States, with the goal of achieving an outcome during the Group of Seven summit next month.