SINGAPORE: Japanese rubber futures fell to their lowest in two months on Friday to close the week lower, as prospects of firmer global supply weighed on the market, while a stronger yen added to the decline.

The April Osaka Exchange (OSE) rubber contract closed down 7.4 yen, or 2.06%, at 351.1 yen ($2.30) per kg. The contract had earlier fallen by as much as 3.12% to 346.5 yen, its weakest since Sept. 9, losing 5.8% for the week.

The January rubber contract on the Shanghai Futures Exchange (SHFE) dipped 45 yuan, or 0.25%, to finish at 17,785 yuan ($2,496.63) per metric ton, logging a fall of 1.72% this week.

The market has strong expectations of increased supply from overseas production areas, said Chinese financial information site Hexun Futures. Raw material prices in Thailand have been normalising, contributing to prices averaging down this week, said Farah Miller, founder of independent rubber-focused data firm Helixtap Technologies. “Besides that, market participants are waiting for the EU’s parliamentary decision on the EUDR extension as well as the US presidential elections for more direction.”

The yen pared some of Thursday’s gains, sliding 0.31% to 152.49 per dollar as traders grew cautious ahead of a three-day weekend in Japan amid big risk events. But less dovish comments from the Bank of Japan had the currency well off a three-month low hit earlier this week. A stronger currency makes yen-denominated assets less affordable to overseas buyers.

Top consumer China’s manufacturing activity swung to growth in October as an expansion in new orders led to a pick-up in production growth, signalling an improvement in the sector at the start of the final quarter.

The front-month December rubber contract on Singapore Exchange’s SICOM platform last traded at 195.2 US cents per kg, down 0.2%.