SINGAPORE: Japanese rubber futures inched higher on Friday, supported by a weaker yen, but were set for a third straight weekly drop. The Osaka Exchange (OSE) rubber contract for July delivery was up 0.1 yen, or 0.1%, at 218.9 yen ($1.63) per kg, as of 0210 GMT, after hitting its lowest since Jan. 4 at 217.6 yen earlier in the session.
For the week, the benchmark OSE contract has lost about 2.5%. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was down 10 yuan, or 0.1%, at 12,555 yuan ($1,826) per tonne. Japan’s benchmark Nikkei share average opened down 0.76%. The dollar was last 0.5% higher against the Japanese yen at 134.62.
A weaker yen makes yen-denominated assets more affordable when purchased in other currencies. Oil prices slid and were on track for weekly losses as strong US economic data heightened concern that the Federal Reserve will continue tight monetary policy to tackle inflation, which could hit fuel demand even as crude stockpiles grow.
The natural rubber market is hindered by weaker oil prices as manufacturers are disincentivised from shifting away from synthetic rubber that is derived from oil, driving natural rubber prices lower. Rubber markets are waiting for signs of a demand pick-up in top buyer China after the country lifted its strict COVID curbs at the end of 2022.
Asian equities slipped, while the dollar hovered around six-week highs as economic data and hawkish comments from Federal Reserve officials revived fears that the US central bank will stick to its monetary tightening path.
The front-month rubber contract on Singapore Exchange’s SICOM platform for March delivery last traded at 138.6 US cents per kg, up 0.4%.
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