SINGAPORE: Japanese rubber futures ended nearly flat on Wednesday, as support from a weaker yen and tight raw material supply was offset by losses in the Shanghai market.

The Osaka Exchange rubber contract for August delivery finished 0.2 yen, or 0.1%, lower at 244.7 yen ($2.07) per kg.

The supply of raw materials is tight due to the ongoing wintering season in the southern parts of Thailand, a Singapore-based trader said, adding that a weaker yen also lent support to OSE prices.

However, traders in the Shanghai market may have been bearish due to the current spike in COVID-19 cases in China, he said.

Wintering is when rubber trees temporarily slow latex production while they shed old leaves and grow new ones.

Japan will closely watch exchange-rate moves as market stability is “very important,” Finance Minister Shunichi Suzuki said on Tuesday in the wake of the yen’s decline to a five-year low against the dollar.

Japan reported a wider-than-expected trade deficit in February as an energy-driven surge in import costs caused by massive supply constraints added to vulnerabilities for the world’s third-largest economy.

The rubber contract on the Shanghai futures exchange for May delivery was down 135 yuan at 13,335 yuan ($2,100.10) per tonne. Earlier in the session, it touched the lowest since July 28 at 13,150 yuan.