SINGAPORE: Japanese rubber futures saw a notable rise on Friday and recorded their most substantial weekly gain in three years amid signs of more fiscal stimulus in China and rising oil prices.

The benchmark contract hit a 15-month high price earlier in the session and recorded a 11.2% weekly rise, with the last comparable weekly increase occurring in October 2020.

The Osaka Exchange (OSE) rubber contract for March delivery was up 7.4 yen, or 2.97%, at 256.9 yen ($1.72) per kg at closing. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery was up 210 yuan, or 1.48%, at 14,770 yuan ($2,021.74) per metric ton. The rise in stakes by Chinese state fund Central Huijin Investment in the country’s four major banks is expected to draw more investors to the market, the official China Securities Journal said on Friday.

Oil prices rose on Friday after the US tightened its sanctions programme against Russian crude exports, raising supply concerns in an already tight market, and global inventories are forecast to decline through the fourth quarter.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The Thai Metrological Department has warned of gusty winds, heavy to very heavy rains and accumulations that may cause flash floods and overflows across the major rubber producer, potentially affecting supply.

Japan’s benchmark Nikkei average closed down 0.55%. Asian shares slid on Friday and were on course for their steepest one-day percentage decline in a week after stronger-than-expected US consumer prices figures bolstered the case for the Federal Reserve to keep rates higher for longer.

The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 146.6 US cents per kg, up 1.1%.