SINGAPORE: Japanese rubber futures tumbled to their lowest in nearly eight weeks on Monday, as a stronger yen and weaker physical rubber prices in top producer Thailand weighed on sentiment. The Osaka Exchange (OSE) rubber contract for December delivery closed down 7 yen, or 2.16%, at 317.1 yen ($1.97) per kg.

The September rubber contract on the Shanghai Futures Exchange (SHFE) closed down 115 yuan, or 0.78%, at 14,610 yuan ($2,009.77) per metric ton.

The dollar slipped 0.14% to 160.615 yen, down from as high as 161.96 on Wednesday, following surprisingly soft US payrolls data on Friday. A stronger Japanese currency makes yen-denominated assets less affordable to overseas buyers.

The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) was down 2.39% at 70.75 baht ($1.94), while block rubber fell 2.81% to 63 baht on Monday. Key Southeast Asian physical markets for natural rubber will likely stay “bearish” as “persistent weak demand from China and hopes of an imminent comfortable world supply” weigh, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber. In futures markets, speculative traders are “largely cautious amid a weak supply-demand fundamental”, Jacob added.

Oil prices dipped on Monday after rising for four weeks, as the prospect of a ceasefire deal in Gaza eased geopolitical tensions in the Middle East, while investors assessed potential disruption to US energy supplies from Tropical Storm Beryl. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.

The front-month August rubber contract on the Singapore Exchange’s SICOM platform last traded at 162.1 US cents per kg, down 0.9%.