SINGAPORE: Japanese rubber futures fell on Friday, as a firmer yen made the commodity less affordable for buyers holding other currencies and falling oil prices disincentivised manufacturers from switching to natural rubber.

The Osaka Exchange (OSE) rubber contract for August delivery was down 1.2 yen, or 0.5%, at 229.8 yen ($1.68) per kg, as of 0209 GMT. For the week, the benchmark OSE contract has gained about 2.1%.

The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was up 5 yuan, or 0.04%, at 12,620 yuan ($1,829.38) per tonne.

Japan’s benchmark Nikkei share average opened up 0.78%. The Japanese yen rose 0.1% against the dollar to 136.59.

Oil prices slipped in early trade but were on track to post gains of nearly 2% for the week as a rebound in China’s factory activity offset growing concerns about rising US crude stocks and potential rate hikes in Europe.

The natural rubber market is hindered by weaker oil prices, leaving manufacturers with little incentive to shift away from synthetic rubber derived from oil.

Asian shares rose after Wall Street stocks reversed losses to end higher overnight, as investors weighed signals of a measured interest rate approach from US Federal Reserve officials and prospects of an economic recovery in China.

The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery was steady, trading at 141.4 US cents per kg.