SHANGHAI: Japanese rubber futures snapped a seven-session rally on Monday, dragged by a firm yen, while Chinese butadiene rubber prices extended their wining streak after a correction.
The Osaka Exchange (OSE) rubber contract for June delivery fell 7.7 yen, or 2.16 percent, to 349.6 yen (USD2.27) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery rose 70 yuan, or 0.43percent, to 16,230 yuan (USD2,333.07) per metric ton.
The most active March butadiene rubber contract on the SHFE gained 460 yuan, or 3.59percent, to 13,265 yuan per ton. The yen jumped to more than a two-month high on Monday as speculation mounted that coordinated intervention by authorities in the US and Japan could be imminent, a prospect Tokyo’s top currency diplomat left wide open while keeping markets guessing, rising as much as 1.2percent to 153.89 per dollar.
A stronger currency makes yen-denominated assets less affordable to overseas buyers. Japan’s Nikkei share average slumped on Monday as a stronger yen broadly weighed on the market, with currency intervention worries further deterring equity buyers.
Open interest across all exchanges increased, suggesting new long positions were established, while trading volume declined on most exchanges, the Japan Exchange Group said in a weekly report.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.1 percent week-on-week last Friday, the exchange said. Prices of Shanghai butadiene rubber rebounded rapidly on Friday and Monday after a correction, which also drove up sentiment for natural rubber, a report from Guotou Anxin Futures said.
Butadiene rubber prices primarily followed raw material butadiene prices instead of oil prices in January, the report added. The front-month rubber contract on Singapore Exchange’s SICOM platform for February delivery remained unchanged at 185.8 US cents per kg as of 0703 GMT.
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