TOKYO: Japanese rubber futures dropped more than 2% on Thursday, pressured by lacklustre Tokyo equities and a stronger yen, though expectations of steady domestic demand helped limit the decline.
The Osaka Exchange (OSE) rubber contract for January delivery ended down 7.2 yen, or 2.2%, at 317.2 yen ($2.16) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 230 yuan to settle at 15,635 yuan ($2,179) per metric ton.
Japan’s Nikkei share average fell 1.45%, pulling back from a record high scaled in the previous session, on concerns over a potential shift in Bank of Japan policy and a stronger yen.
“Rubber prices have been following the Japanese equities market this week, particularly stocks related to domestic consumption,” said Jiong Gu, an analyst at Yutaka Trusty Securities, adding that the strong yen was also a selling factor.
Japan rubber futures track oil higher
Still, the losses were capped as inventory drawdowns were steady
in July, raising views of strong domestic demand, he said.
The yen traded at 146.53 against the U.S. dollar, compared with around 147.93 yen during the Asian trade late on Wednesday.
A stronger currency makes yen-denominated assets less affordable to overseas buyers.
The dollar weakened to a two-week low against a basket of major peers on shifting expectations of U.S. rate cuts, with comments from the U.S. Treasury Secretary Scott Bessent also sparking some wagers on an outsized 50 basis point cut.
The front-month rubber contract on Singapore Exchange’s SICOM platform for September delivery last traded at 168.3 U.S. cents per kg, down 0.6%.
American Dollar Exchange Rate