SINGAPORE: Japanese rubber futures are set for a seventh drop in eight days on Tuesday, as oil prices slid and investor confidence took a hit amid looming fears of a US banking crisis and caution ahead of inflation data due later in the day.

The Osaka Exchange (OSE) rubber contract for August delivery was down 2.2 yen, or 1%, at 215.5 yen ($1.61) per kg, as of 0202 GMT. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was up 25 yuan, or 0.21%, at 11,980 yuan ($1,745.24) per tonne.

Japan’s benchmark Nikkei average opened 1.35% lower. Japanese banking shares tumbled to the lowest in nearly three months on Tuesday, dragging the Nikkei share average down more 2%, as investors rushed for the exit amid worries about contagion from Silicon Valley Bank’s collapse.

The Japanese yen softened 0.40% to 133.72 per dollar. A weaker currency makes yen-denominated assets more affordable when purchased in other currencies. Still, oil prices slipped on Tuesday, extending the previous day’s slide.

Lower oil prices incentivise manufacturers to shift to synthetic rubber derived from oil, hindering the natural rubber market. Asia’s share markets slid, with Japan’s financial stocks leading losses, as fears of US banking rout gripped investors ahead of crucial inflation data due later in the day. The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last traded at 133.3 US cents per kg, up 0.8%.