SHANGHAI: Japanese rubber futures fell to their lowest level since August 17 on Monday, extending losses to a fourth straight session, as the yen held near seven-month highs and rubber demand softened. The Osaka Exchange rubber contract for February delivery was down 4.5 yen, or 1.04percent, at 426.5 yen (USD2.76) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 370 yuan, or 1.91percent, to 18,970 yuan (USD2,828.60) per metric ton.
The most active October butadiene rubber contract on the SHFE fell 510 yuan, or 3.25percent, to 15,195 yuan per metric ton. A stronger yen weighed on prices ahead of a possible Bank of Japan rate hike and potential currency intervention by the Ministry of Finance, with carry trades also unwinding in the dollar-yen pair, Japan Exchange Group said in a report on Monday.
The Japanese yen was 0.3percent weaker at 154.03 per US dollar, but traded near a seven-month high of 152.89 that it touched last week. A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Japan’s Nikkei share gauge lost ground on Monday, dragged down by technology shares after leaders of major AI companies called for a slowdown in development.
The capacity utilisation rate of sampled all-steel tyre companies in top rubber consumer China was at 65.71percent last week, falling 0.23 percentage points week-on-week and 1.51 percentage points from the previous year, according to data from Longzhong Information.
Average purchases of natural rubber by tyre manufacturers declined last week amid rising raw material costs, with most companies remaining in a state of production control, said analysts from Chaos Ternary Futures Research Institute.
The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 237.3 US cents per kg, down 1.9percent as of 0715 GMT.