Japanese rubber futures snap 4-day losing streak on strong physical prices

TOKYO: Japanese rubber futures inched higher on Tuesday, snapping a four-day losing streak, as investors hunted for bargains and firmer physical prices lent support in thin trading amid the Lunar New Year holiday in China and other Asian countries.

The Osaka Exchange (OSE) rubber contract for July delivery finished 0.5 yen, or 0.1percent, higher at 345.7 yen (USD2.26) per kg. “Bargain-hunting provided support, while strong physical prices buoyed market sentiment ahead of the wintering season in producing countries,” said Jiong Gu, an analyst at Yutaka Trusty Securities. Rubber crops typically undergo a wintering season of low production from February to May, when trees shed leaves and latex output declines.

“But gains were limited by weaker-than-expected economic data in Japan, and as the Tokyo equity market paused after a post-general election rally following Prime Minister Sanae Takaichi’s landslide victory,” Gu added.

Japan’s economy limped back to meagre growth in the fourth quarter, significantly missing market expectations in a key test for PM Takaichi’s government as cost-of-living pressures drag on confidence and domestic demand.

Lunar New Year holidays in both China and Singapore led to low market liquidity. The Shanghai Futures Exchange (SHFE) is closed from February 15. Trading will resume on February 24.

The Singapore Exchange is closed from February 17 to 18. Trading will resume on February 19. The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) and block rubber rose 0.69percent and 1.35percent to 74.07 baht (USD2.37) per kg and 65.88 baht per kg, respectively.

Japan’s Nikkei share average fell on the day as investors booked profits amid few fresh trading cues, while the post-election euphoria was ebbing and the earnings season was winding down. The yen strengthened 0.3 percent to 153.04 per US dollar. A stronger currency makes yen-denominated assets less affordable to overseas buyers.