SINGAPORE: Japanese rubber futures logged their steepest daily drop in over four years on Monday as US President Donald Trump’s fresh tariffs kicked in, further widening a global trade war and denting demand prospects.

The Osaka Exchange (OSE) September rubber contract ended morning trade 26.7 yen lower, or 8.33%, at 294 yen ($2.02) per kg, posting its biggest daily drop since November 4, 2020. * The contract plunged to 291.9 yen earlier in the session, its lowest since February 21, 2024.

The May rubber contract on the Shanghai Futures Exchange (SHFE) slid 995 yuan, or 6%, to 15,580 yuan ($2,132.46) per metric ton. The most active May butadiene rubber contract on the SHFE plunged 945 yuan, or 7%, to 12,555 yuan ($1,718.43) per metric ton.

“The market is currently in a panicked state with sentiment-driven selling,” said a Singapore-based rubber trader, adding that current movements are driven more by political events than fundamentals or technicals.

On Friday, China struck back with countermeasures, including extra levies of 34% on all US goods and export curbs on some rare earths. Japan’s Nikkei sank 6.6% to hit lows last seen in late 2023, with Asian stock indexes pummeled on the day, as White House officials defended Trump’s levies that wiped out nearly $6 trillion in value from US stocks last week.

The dollar fell 0.63% against the yen to 145.92 as investors poured into safe havens like the yen, making yen-denominated assets less affordable to overseas buyers.

“Until overall sentiment and broader trends across equities, commodities and other assets stabilise, it is difficult to identify a support level,” the trader added. * The front-month rubber contract on the Singapore Exchange’s SICOM platform for May delivery last traded at 165.9 US cents per kg, down 8.5%.