SINGAPORE: Japanese rubber futures snapped a three-day rally on Friday to end the week lower, amid a drop in local equities, a stronger yen, and weaker rubber physical prices.

The Osaka Exchange (OSE) rubber contract for September delivery closed down 2.1 yen, or 0.64%, at 325.2 yen ($2.15) per kg. It fell 1.03% week-on-week. Japan’s Nikkei share average tumbled 1.96% to a three-week low on Friday, logging its worst week since December 2022. Safe-haven bids and fresh warnings from Japanese authorities helped buoy the yen, which briefly hit a two-week high against the greenback.

A stronger yen makes yen-denominated assets less affordable for overseas buyers. OSE futures are following the correction in raw material prices in Thailand, as we approach the predicted end of wintering, especially in Northeastern Thailand, said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company.

Top producer Thailand’s benchmark export-grade smoked rubber sheet extended declines for a fourth day on Friday to shed 1.75% weekly. “China (being) away from the market yesterday and today meant prices probably drifted downwards and any bids were more on the conservative side,” Miller added.

The Shanghai Futures Exchange was closed for a market holiday. Trading will resume on April 8. Japan’s coincident index fell for the second straight month in February, reflecting weakening momentum. Bank of Japan Governor Kazuo Ueda said inflation would likely accelerate from “summer towards autumn” as bumper pay hikes push up prices, hinting at another possible rate hike.

US Treasury Secretary Janet Yellen said on Friday that concerns over the global economic fallout from China’s excess manufacturing capacity have intensified.

The front-month rubber contract on the Singapore Exchange’s SICOM platform for May delivery last traded at 162.1 US cents per kg, down 0.37%.