TOKYO: Japanese rubber futures dropped to a two-week low on Friday, tracking losses in the Shanghai market on worries over slow demand in top buyer China and fears of a global recession, resulting in a weekly decline.

The Osaka Exchange (OSE) rubber contract for September delivery finished 1.9 yen, or 0.9%, lower at 204.6 yen ($1.6) per kg, after hitting the lowest since March 24 of 203.8 yen earlier in the session. The benchmark lost 2.6% for the week. The rubber contract on the Shanghai futures exchange (SHFE) for September delivery fell 150 yuan to finish at 11,625 yuan ($1,691) per tonne. It slid to as low as 11,560 yuan earlier, the lowest since March 16.

“The OSE stayed under selling pressure as investors remained bearish due to sluggish demand and higher inventories in China,” said Jiong Gu, an analyst at Yutaka Trusty Securities Co Ltd.

“Japanese market tracked the slumping Shanghai prices, but we may see a correction next week as the OSE’s futures are now cheaper than the spot prices.” China’s manufacturing activity expanded at a slower pace in March, official data showed last week, suggesting hopes of a strong post-COVID economic recovery are faltering amid weaker global demand and a continued property market downturn.

China has imposed further sanctions on Hsiao Bi-khim, Taiwan’s de facto ambassador to the United States, prohibiting her and family members from entering the mainland, Hong Kong and Macau, state media reported.

Economic data on Thursday suggested the US labour market is feeling the effects of the Fed’s aggressive interest rate hikes designed to cool the economy and curb inflation. * Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.7% from last Friday, the exchange said. Singapore’s financial markets were closed on Friday for a public holiday. Trading will resume on Monday, April 10.