SINGAPORE: Japanese rubber futures dipped for a second session on Thursday amid muted trading as China goes on a long holiday, while lacklustre demand in key economies continued to weigh on investor sentiment.

The Osaka Exchange (OSE) rubber contract for October delivery fell 0.7 yen, or 0.23%, at 302.7 yen ($1.95) per kg.

Chinese tyre manufacturers’ damper-than-expected restocking ahead of the holidays had weighed on the market, said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company. While rubber-producing areas across Southeast Asia and in the Ivory Coast have remained dry and hot, tapping has commenced, which adds pressure to prices, Miller said. Physical prices “have traded downwards, which created more pressure on futures to correct after sharp rises in Q1 this year”, Miller added.

The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) was at 83.13 Thai baht ($2.25) per kg on a free-on-board basis on Thursday, 0.37% lower than Tuesday.

Muted sentiment remains in rubber markets, with China’s absence aggravating the existing “weak demand condition”, said Jom Jacob, co-founder of India-based analysis firm What Next Rubber, noting that manufacturing contractions and subdued consumer confidence in the United States had dampened rubber demand prospects. Japan’s benchmark Nikkei average closed 0.1% lower.

The yen slid against the dollar, reversing direction after a sudden surge overnight that traders and analysts were quick to attribute to intervention by Japanese authorities.