SINGAPORE: Japanese rubber futures edged up on Thursday to hit their highest levels in more than two weeks, buoyed by supply disruptions in top producer Thailand and firmer economic data from top consumer China, although a stronger yen capped gains.
The Osaka Exchange (OSE) rubber contract for January delivery closed up 1.5 yen, or 0.5%, at 321.5 yen ($2.20) per kg. The contract hit an intraday high of 323.6 yen, its strongest level since July 22. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 125 yuan, or 0.8%, to 15,810 yuan ($2,120.47) per metric ton.
Favourable market conditions - as supply concerns grow amid continued harvest disruptions caused by rains in Thailand - are shrugging off the negative influences of a volatile yen and persistent weak demand from China, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.
Thailand’s meteorological agency reported abundant rainfall over upper Thailand from July 29 to Aug. 4, with heavy to very heavy rainfall and flooding in several areas.
The yen was choppy on Thursday after a sharp drop in the previous session in a volatile week that has left sentiment fragile. Investors are weighing the unwinding of popular carry trades while eyeing the rate path Japan’s central bank is likely to take.
The Japanese currency was last 0.4% higher at 146.02 per dollar. A stronger Japanese currency makes yen-denominated assets less affordable to overseas buyers.
China’s unexpectedly strong import growth in July could be an early indication of a rebound in its manufacturing industry’s demand for raw materials, Jacob added.
The front-month September rubber contract on the Singapore Exchange’s SICOM platform last traded at 170.1 US cents per kg, up 0.7%.
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