SINGAPORE: Japanese rubber futures snapped a three-day rally on Friday and logged a weekly loss, as a stronger yen and potential trade tensions between the US and top consumer China outweighed fears of lower supply from Thailand.
The Osaka Exchange (OSE) rubber contract for June delivery ended daytime trade 2.5 yen lower, or 0.65%, at 382 yen ($2.46) per kg. The contract lost 0.75% this week.
The rubber contract on the Shanghai Futures Exchange (SHFE) for March delivery closed up 25 yuan, or 0.14%, to 17,430 yuan ($2,404.27) per metric ton, shedding 1.03% so far this week. The most-active February butadiene rubber contract on the SHFE fell 80 yuan, or 0.54%, to 14,825 yuan ($2,044.94) per ton. The yen jumped decisively higher after the Bank of Japan raised interest rates to their highest since 2008, last 0.4% stronger at 155.43 per dollar.
A stronger currency makes yen-denominated assets less affordable to overseas buyers. US lawmakers introduced a bill on Thursday that would revoke China’s preferential trade status with the United States, phase in steep tariffs and end the “de minimis” exemption for low-value Chinese imports. Still, US President Trump said his conversation with Chinese President Xi Jinping was “friendly”, with his comments causing Chinese equities to rise. In top rubber producer Thailand, its meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from Jan. 27-29. China’s stimulus scheme for consumer goods trade-ins boosted last year’s consumption growth by more than 1 percentage point, Vice Commerce Minister Sheng Qiuping said on Friday. The front-month rubber contract on Singapore Exchange’s SICOM platform for February delivery last traded at 199.6 US cents per kg, up 0.4%.
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