SINGAPORE: Japanese rubber futures appeared poised for their worst Weekly drop in nearly three months on Friday, as weak China demand and diminished domestic manufacturing activity deepened trader pessimism about the economy. The Osaka Exchange (OSE) rubber contract for November delivery was down 0.2 yen, or 0.1%, at 206.3 yen ($1.44) per kg, as of 0204 GMT. The contract was on track for its fourth session of losses and the longest losing streak since March.
The benchmark contract dropped 2.4% for the week so far. Japan’s benchmark Nikkei average opened 0.58% higher. Japan’s manufacturing activity fell back into contraction in June and service sector growth slowed for the first time in seven months, surveys showed on Friday, as business confidence and demand weakened. The yen strengthened 0.10% against the dollar to 142.99, making yen-dominated assets less affordable when purchased in other currencies. Oil prices were flat in early trading on Friday, but headed for a 3% drop for the week on worries about the outlook for fuel demand after a bigger-than-expected interest rate hike in the UK and warnings about looming US rate hikes. Lower oil prices incentivise manufacturers to shift to synthetic rubber, derived from oil, hindering the natural rubber market. Federal Reserve Chair Jerome Powell said on Thursday the US central bank would move interest rates at a “careful pace” from here as policymakers edge towards a stopping point for their historic round of monetary policy tightening. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.5% from June 16, according to data released by the bourse on Wednesday. Trading was light as Chinese markets were closed for the Dragon Boat festival. Chinese markets will resume trading on Monday, June 26. The front-month rubber contract on Singapore Exchange’s SICOM platform for July delivery last traded at 132.5 US cents per kg, down 0.1%.
Comments
Comments are closed.