SINGAPORE: Japanese rubber futures rose on Friday after two sessions of losses, buoyed by reports of rising inflation and possible supply shortages, though the strengthening yen limited gains.

The Osaka Exchange (OSE) rubber contract for April delivery was up 4.1 yen, or 1.6%, at 266 yen ($1.78) per kg at closing.

For the week, however, the benchmark contract has fell 0.07%, recording its first week of downturn after two consecutive weeks of increases. The rubber contract on the Shanghai futures exchange (SHFE) for January delivery was up 95 yuan, or 0.7%, at 13,970 yuan ($1,937.29) per metric ton.

“Following the Japanese holiday, there might have been a technical rebound and fluctuations in the USD/JPY currency movement,” said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company.

“On the physical front, there have been changes in the upstream raw material sector. Thai sellers have reported ongoing rains which affect yield, and Ivory Coast’s imposition of export restrictions on cup lump after November 30 2023 could potentially result in higher prices,” she added.

Japan’s core consumer price growth picked up slightly in October, after easing the previous month, reinforcing investors’ views that stubborn inflation may push the Bank of Japan (BOJ) to roll back monetary stimulus before long. The Japanese yen strengthened 0.21% to 149.23 per dollar.

The Asian currency has slowly crawled away from the near 33-year low of 151.92 it touched at the start of last week and is up 1.5% for the month. Japan’s benchmark Nikkei average closed up 0.52%.