SINGAPORE: Japanese rubber futures snapped a four-session decline on Tuesday amid higher oil prices and a weaker yen, although softer-than-expected industrial output and retail sales data from top consumer China weighed on sentiment.
The Osaka Exchange (OSE) rubber contract for September delivery closed up 0.7 yen, or 0.22%, at 314.3 yen ($2.03) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 205 yuan to finish at 14,515 yuan ($2,005.19) per metric ton.
Oil prices rose amid heightened tensions in the Middle East after Israel’s military chief said his country would respond to Iran’s weekend missile and drone attack amid calls for restraint by allies. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The Japanese yen weakened to a fresh 34-year low against the dollar. The global equity sell-off and fears of economic slowdown are impacting market sentiment and the rubber demand outlook, a Singapore-based trader said.
Asian stocks fell as stronger-than-expected US March retail sales further reinforced expectations that the Federal Reserve is unlikely to rush to cut interest rates. Japan’s benchmark Nikkei average fell nearly 2% to close at an eight-week low.
While China beat estimates to grow 5.3% in the first quarter year-on-year, slowing retail sales and industrial output in March suggest an overall soft momentum.
Co-operation between China and Germany was not a “risk”, Chinese President Xi Jinping said, amid complaints by the EU about Chinese goods flooding markets.
Comments
Comments are closed.