SINGAPORE: Japanese rubber futures ended the year with a 17.7% increase following a dip in 2022, driven by market optimism over potential stimulus measures from the Chinese government.

The Osaka Exchange (OSE) climbed 3 yen, or 1.2%, to 256.5 yen ($1.82) per kg at closing on Friday.

This month, the benchmark contract recorded a 2.5% loss, marking its first month of decline following four consecutive months of gains. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was up 260 yuan, or 1.9%, at 14,160 yuan ($1,997.24) per metric ton.

China’s manufacturing activity likely contracted for the third consecutive month, a Reuters poll showed on Thursday, weighed by soft demand for manufactured goods.

The country’s central bank said on Thursday it would step up macroeconomic policy adjustments to support the economy and promote a rebound in prices, amid signs of rising deflationary pressures. The Japanese yen last strengthened 0.1% and traded at 141.24 against the dollar.

Earlier in the session, the dollar dropped as low as 140.27 yen, its lowest level since July 28. Japan’s benchmark Nikkei average closed 0.22% lower. Asian stocks took a breather on the last trading day of the year and are set to snap their two-year losing streak with investors buoyed by the expectations that the Federal Reserve will start cutting interest rates next year. The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 154.7 US cents per kg, up 2.4%.

Japan’s financial markets will be closed until Jan. 3 for the New Year holiday. Trading will resume on Jan. 4. Singapore’s financial markets will be closed on Jan. 1, and trading will resume on Jan. 2.