SINGAPORE: Japanese rubber futures continued to climb for a second consecutive session on Friday as fiscal stimulus in top consumer China continues to boost trader sentiment.

Osaka Exchange’s rubber contract for February delivery finished 2.2 yen, or 0.9%, higher at 236 yen ($1.60) per kg. The benchmark contract recorded a 0.9% weekly gain, marking the fifth consecutive week of increasing prices.

The rubber contract on the Shanghai futures exchange for January delivery rose 155 yuan to finish at 14,455 yuan ($1,988.72) per metric ton. China’s central bank rolled over maturing medium-term policy loans while keeping interest rates unchanged on Friday, focusing on boosting liquidity on top of a similar move the previous day.

On Thursday, the PBOC said it would cut the amount of cash that banks must hold as reserves, after lowering key policy rates last month to aid economic recovery. Across the curve, the rubber futures markets were bullish, especially on the SHFE.

Several major producers were heard selling into the Shanghai International Energy Exchange (INE) due to the attractive levels, said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company.

Japan’s benchmark Nikkei average closed up 1.1%, rising to its highest in more than two months.

More broadly, Asian stocks also rose, extending a global equity rally, after better-than-expected Chinese economic data added to the good vibes from expectations that tightening campaigns by the world’s biggest central banks were close to over.

The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 142.9 US cents per kg, down 0.2%.

Japan’s financial markets will be closed on Monday, Sept. 18 for a national holiday. Trading will resume on Tuesday.—Reuters

Copyright Business Recorder, 2023