KUALA LUMPUR/ SINGAPORE: Japanese rubber futures rose to a seven-year high on Thursday, following a two-day slump, lifted by a soaring domestic stock market and expectations for its rally to continue this year, while higher oil prices also lent support.

The Osaka Exchange (OSE) rubber contract for July delivery closed up 7.6 yen, or 2.57%, at 303.6 yen ($2.02) per kg, the highest close since Feb. 17, 2017.

It logged an intraday high of 307.5 yen, a 3.89% rise from the previous close. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery rose 225 yuan to finish at 13,760 yuan ($1,913.61) per metric ton.

Japan’s Nikkei share average rocketed to an all-time peak on Thursday after US chip designer Nvidia’s unexpectedly strong revenue forecast lifted Asian tech stocks. Analysts expect the Nikkei to end 2024 at 39,000, higher than their forecast of 35,000 in November, at the end of 2024, a Reuters poll published on Feb. 22 showed. Oil prices rose on Thursday on improving signs of US refinery demand.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Thailand’s meteorological agency warned that severe weather from Feb. 24-26 in upper Thailand could lead to crop damage.

Japan’s factory activity extended declines in February, suggesting business conditions were worsening as the economy struggles to emerge from recession. Japan’s January inflation is expected to have undershot the central bank’s 2% target for the first time in nearly two years, a Reuters poll showed.

The Japanese yen slipped 0.04% against the dollar to 150.23 per dollar. The front-month rubber contract on the Singapore Exchange’s SICOM platform for May delivery last traded at 159.1 US cents per kg, up 2.18%. Japan’s financial markets will be closed on Feb. 23, and trading will resume on Feb. 26.