SINGAPORE: Japanese rubber futures fell further on Wednesday, as slowing factory activity and a firm yen outweighed China’s latest attempts to buttress its faltering economy.

Osaka Exchange’s rubber contract for January delivery finished 1.7 yen, or 0.9%, lower at 198.0 yen ($1.39) per kg. The benchmark contract sank as low as 196.9 yen per kg earlier in the session and has been lingering at a near two-year low since July 18.

The rubber contract on the Shanghai futures exchange for September delivery fell 50 yuan to finish at 12,210 yuan ($1,700.11) per metric ton. Japan’s benchmark Nikkei average closed 2.30% lower. The yen firmed 0.47% against the dollar to 142.68, making yen-dominated assets less affordable for overseas buyers.

Global factory activity remained in a slump in July, private surveys showed on Tuesday, a sign slowing growth and weakness in China were taking a toll on the world economy.

China’s finance ministry on Wednesday unveiled a package of tax relief measures to support small businesses and rural households, as the world’s second-largest economy struggles with a post-COVID recovery.

Earlier this week, multiple ministries, regulators and the central bank had also pledged to expand consumption in the automobile, real estate and services sector.

We should see a floor soon as overseas orders seem to be improving despite China’s weak domestic demand, said a Singapore-based trader, who added that China’s inventory will need to come down before futures see an uptick. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.8 % from a week earlier, the exchange said last Friday.