Japanese rubber futures climb on lower yield

Japanese rubber futures rose on Tuesday after three consecutive sessions of declines, helped by a fall in yield due to poor weather, though unfavourable factory data in Japan limited gains. The Osaka Exchange (OSE) rubber contract for March delivery was up 0.6 yen or 0.2% at 256.5 yen ($1.72) per kg at closing.

However, the contract on the Shanghai futures exchange (SHFE) for January delivery was up 80 yuan, or 0.6%, at 14,550 yuan ($1,991.57) per metric ton. The Thai Meteorological Department has warned of severe weather conditions, with gusty winds, heavy-to-very heavy rains and accumulations that may cause flash floods and overflows. Analysts have warned that heavy rains in Thailand have adversely affected rubber yield.

Japan’s factory activity shrank for a fifth straight month in October while the service sector saw its weakest growth this year, a survey showed amid growing uncertainty over the outlook for the world’s third-largest economy.

The Japanese yen had hit the sensitive 150-level both on Friday and Monday, and last traded at 149.4. Traders see the 150 threshold as a possible line-in-the-sand for Japanese authorities to intervene in the currency market.

Japan’s benchmark Nikkei average closed up 0.2%. Asian equities rose slightly on Tuesday, just off their lowest since November 2022, while the dollar eased as traders avoided bets ahead of economic data expected to offer clues to the next steps by the US Federal Reserve. The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 145.6 US cents per kg, up 0.1%.

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