RUBBER Japanese futures rise on Yen weakness, Shanghai rebound

  • Japanese rubber futures rose on Friday as the yen’s fall against the US dollar prompted buying, with support also coming from a rebound in Shanghai futures from 2-month lows and half on positional adjustments ahead of China holiday week.
  • The Osaka Exchange rubber contract for July delivery ended at 2.9 yen, or 1.2%, up at 239.4 yen ($2.07) per kg after dropping to an earlier low level in four and a half weeks to 232.0 yen.
  • The benchmark posted its second consecutive weekly decline with a 2% loss amid fears that increases in U.S. interest rates could slow the recovery of the global economy.
  • “OSE followed the Shanghai market, which had plunged early in a trade but rebounded later,” said a Singapore-based trader, adding that a weaker yen was also affecting prices.
  • The rubber contract on the Shanghai futures exchange for May delivery fell 100 yuan, or 0.7%, to end at 14,150 yuan ($2,223) a tonne on Friday. It earlier touched 13,860 yuan, the lowest level since Nov. 10.
  • The US dollar was trading at around 115.62 yen, down from 114.65 yen on Thursday. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
  • “It was all about position adjustment before the long holiday in China,” said a Tokyo dealer.
  • “Investor sentiment could remain bearish going forward as global equity prices continue to correct amid expectations of monetary policy tightening in the United States,” he added.
  • Markets in mainland China will be closed for China’s week-long Lunar New Year holiday from Jan. 31.
  • Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.8% from last Friday, the exchange said on Friday.
  • The first-month rubber contract for February delivery on the Singapore Stock Exchange’s SICOM platform last traded at 174.0 US cents per kg, down 1.2%.

SINGAPORE, Jan. 28 (Reuters) – ($1 = 115.6200 yen)

($1 = 6.3652 yuan)

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Reporting by Yuka Obayashi and Isabel Kua Editing by Shailesh Kuber and David Goodman

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