SINGAPORE: Japanese rubber futures inched higher on Wednesday, tracking gains in the Shanghai market following a government pledge for economic policies to boost consumption in top buyer China, while a weaker yen also supported sentiment.
The Osaka Exchange’s rubber contract for December delivery finished 0.6 yen, or 0.3%, higher at 202.9 yen ($1.46) per kg. The rubber contract on the Shanghai futures exchange for September delivery rose 65 yuan to finish at 12,200 yuan ($1,691) per metric ton.
Japan’s benchmark Nikkei average closed up 1.24%. China’s top economic planner pledged on Tuesday that it would roll out policies to “restore and expand” consumption without delay, as consumers’ purchasing power remained weak, suggesting an urgency to revive domestic demand.
“China’s announcement of policy measures to boost consumption has lifted demand sentiment slightly,” said a Singapore-based trader. “The market is still wary and looking for more concrete signs of demand growth, hence the marginal increase in prices.”
The Japanese yen fell marginally to 139.41 per dollar. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
Confidence at big Japanese manufacturers fell in July for the first time in six months, the Reuters Tankan survey showed, in a sign of growing exporter concern about weakening overseas demand.
Stock markets were mixed with growth concerns dragging down China while elsewhere futures rose after British inflation came in surprisingly soft for once and US data stoked hopes the world’s biggest economy can avoid recession.
The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 128.6 US cents per kg, down 0.5%.
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