TOKYO: Japanese rubber futures dropped on Wednesday, as softer oil prices and falling Tokyo stock market diminished investors’ risk appetite, but trade was light with many Asian participants away for a holiday.
The Osaka Exchange (OSE) rubber contract for October delivery finished 3.6 yen, or 1.2%, lower at 303.4 yen ($1.92) per kg.
“Rubber prices came under pressure as other commodities such as oil and gold remained in a bearish tone,” a Tokyo-based dealer said.
“But 300 yen level is likely to be the support line for the time being,” he said.
Oil fell more than 1% on Wednesday, losing ground for a third straight session, on hopes of a ceasefire agreement in the Middle East and on rising crude inventories and production in top consumer the United States.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Japan’s Nikkei share average closed lower on Wednesday, with traders maintaining a cautious stance on the first day of the month ahead of the US Federal Reserve’s monetary policy decision.
Growth slowed in China’s manufacturing and services sectors in April, official surveys showed on Tuesday, suggesting a loss of momentum for the world’s second-biggest economy at the start of the second quarter. China will step up support for the economy with prudent monetary and proactive fiscal policies, including interest rates and bank reserve requirement ratios (RRR), the Politburo of the Communist Party was quoted by state media as saying on Tuesday.
Japan’s factory activity shrank at a slower pace in April as declines in output and new orders eased, a private-sector survey showed on Wednesday.
Mainland China’s financial markets will be closed from Wednesday, May 1, through Sunday, May 5, for the Labor Day holiday. Markets will resume trade on Monday, May 6. Singapore’s financial markets are closed on Wednesday for a national holiday. Trading will resume on Thursday, May 2.
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