Japan rubber futures extends decline on profit booking, rising yen

Japanese rubber futures declined on Monday, extending a three-session losing streak, as traders booked profits after a strong rally amid a strengthening yen.

The Osaka Exchange (OSE) rubber contract for June delivery fell2.1 yen, or 0.6%, to350 yen ($2.22) per kg as of 0218 GMT.

The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery lost130 yuan, or 0.82%, to 15,785 yuan ($2,266.69) per metric ton.

The most active March butadiene rubber contract on the SHFE shed200 yuan, or 1.67%, to 11,805 yuan per metric ton.

Prices took a breather after rallying to nine-month highs in recent weeks, driven by strong physical demand and Chinese buying ahead of the Lunar New Year holidays, Japan Exchange Group said in a report on Monday.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.6% from last Friday, the exchange said.

The yen slid to its lowest since January 9to157.50.

A stronger currency makes yen-denominated assets less affordable to overseas buyers.

However, steadier oil prices may curb downside in rubber prices.

Oil prices were little changed on Monday after rising in the last session, as Iran’s deadly crackdown on protests quelled the civil unrest in the country, reducing the chance of a U.S. attack on the major Middle Eastern producer that could disrupt 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 the Singapore Exchange’s SICOM platform for February delivery last traded at 181 U.S. cents per kg, down 0.3%.