SINGAPORE: Japanese rubber futures slipped on Monday, weighed down by prospects of an implementation delay in a key European Union deforestation law, although losses were limited by supply worries and a weaker yen.

The March Osaka Exchange (OSE) rubber contract was down 2.1 yen, or 0.53%, at 397.7 yen ($2.68) per kg, as of 0155 GMT. The Shanghai Futures Exchange is closed from Oct. 1 to 7 for China’s National Day holiday. Trading will resume on Tuesday, Oct. 8. The European Commission said on Wednesday that it would propose

to delay the implementation of its European Union Deforestation-free Regulation (EUDR) law by a year. The law would require companies in the bloc from Dec. 30 to prove supply chains of their commodities, including rubber, do not contribute to deforestation.

Last week’s decline in rubber prices followed news of a possible delay in the implementation of the EUDR, Japan Exchange Group said in a report. Supply concerns continue to support prices on the OSE, while the sharp drop in the yen against the dollar could attract some “light buying interest”, Japan Exchange Group said. From Oct. 6-12, isolated heavy rains are likely in Thailand’s lower Central area and possibly in the South, the country’s meteorological agency said.

Japan’s yen fell to its lowest in nearly two months as the dollar extended last week’s rally. A softer Japanese currency makes yen-denominated assets more affordable to overseas buyers.

Oil prices pared gains after charting their biggest weekly rise in over a year on Friday amid mounting threats of a region-wide war in the Middle East.