SINGAPORE: Japanese rubber futures sustained gains for seven straight sessions and surged to a nearly three-year high on Thursday, as Beijing’s economic stimulus measures reinforced hopes of economic recovery in top rubber consumer China, while higher oil prices and a weaker yen also lent support.

The Osaka Exchange (OSE) rubber contract for June delivery closed up 9.5 yen, or 3.41%, at 288.4 yen ($1.95) per kg, the highest close since Feb. 25, 2021.

The rubber contract on the Shanghai futures exchange (SHFE) for May delivery rose 190 yuan to finish at 13,760 yuan ($1,921.44) per metric ton.

China on Wednesday said it is widening the usage for commercial property lending by banks in its latest effort to ease a liquidity crunch facing troubled real estate firms. China’s central bank announced a deep cut to bank reserves on Wednesday, in a move that will inject about $140 billion of cash into the banking system and send a strong signal of support for a fragile economy and plunging stock market. Oil prices rose on Thursday as US crude stockpiles fell more than expected last week, while Chinese stimulus reinforced economic recovery hopes. Natural rubber often takes direction from oil prices, as it competes for market share with synthetic rubber, which is made from crude oil. Japan’s benchmark Nikkei average closed flat.

The Japanese yen weakened 0.16% to 147.74 against the US dollar. A weaker unit makes yen-denominated assets more affordable when purchased in other currencies.

An unusually large delegation of about 200 Japanese business leaders arrived in China this week to bolster economic relations. China and Japan will deepen understanding of each other’s export control systems and improve transparency of export control measures, China’s commerce ministry said on Thursday.