TOKYO: Japanese rubber futures lost ground on Monday, pressured by weakness in the Shanghai market and a stronger yen, while declines in Tokyo equities and oil prices also weighed on prices.
The Osaka Exchange (OSE) rubber contract for March delivery was down 4.4 yen, or 1.42 percent, at 305.8 yen (USD2.05) per kg. The contract gained 1percent last week. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery dropped 50 yuan, or 0.32 percent, to 15,375 yuan (USD2,159.50) per metric ton.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 4.5 percent from a week earlier, the exchange said on Friday.
China’s central bank said on Friday it would step up monetary policy adjustments and strengthen coordination between monetary and fiscal policies to support economic growth amid a “complex and severe” external environment.
China is the world’s top rubber buyer. The dollar was down 0.4 percent against the yen at 148.94. A stronger Japanese currency makes yen-denominated assets less affordable to overseas buyers. Japan’s Nikkei slipped 0.8 percent as investors braced for a possible shutdown of the US government, which would in turn delay publication of the September payrolls report and a raft of other key data. Oil prices slipped after Iraq’s Kurdistan region resumed crude oil exports via Turkey over the weekend and as OPEC+ plans another oil output hike in November, adding to global supplies.
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 October delivery last traded at 172.8 US cents per kg, down 0.5 percent.
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