TOKYO: Japanese rubber futures fell on Monday, dragged down by a stronger yen and a sharp drop in oil prices, while broader macro headwinds also weighed on the market.
The Osaka Exchange (OSE) rubber contract for January delivery was down 5.4 yen, or 1.29 percent, at 414.2 yen (USD2.64) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 165 yuan, or 1 percent, to 16,295 yuan (USD2,413.11) per metric ton.
The most active September butadiene rubber contract on the SHFE lost 170 yuan, or 1.33 percent, to 12,570 yuan per metric ton.
The yen leapt on Monday, keeping traders on alert for further intervention from authorities to shore up Japan’s historically weak currency, days after Tokyo and Washington jointly intervened in the foreign exchange market.
A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Japan’s Nikkei fell nearly 1 percent on Monday from a one-week high in the previous session.
Oil prices tumbled more than USD4 a barrel on Monday after US President Donald Trump held off on a fresh attack on Iran, seeking to reach a quick deal that would halt Tehran’s nuclear ambitions and reopen the Strait of Hormuz.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Expectations of higher interest rates and persistent inflationary pressures could also continue to weigh on broader commodity markets, Japan Exchange Group said in a report on Monday.
The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 210.2 US cents per kg, up 0.3 percent as of 0700 GMT.
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