SINGAPORE: Japanese rubber futures extended a rally to hit a more than three-month high on Wednesday, helped by continued optimism for an economic recovery in top buyer China despite holiday-thinned trade in the country.
The Osaka Exchange rubber contract for June delivery was up 1.3 yen, or 0.6%, at 233.5 yen ($1.79) per kg as of 0230 GMT, after hitting its highest since Oct. 11 of 234.3 yen earlier in the session.
China’s financial markets will be closed for a week for the Lunar New Year holiday, which officially started Jan. 21. The markets will resume trading on Monday, Jan. 30. Japan’s benchmark Nikkei share average opened down 0.45%.
Rubber demand sentiment has been positive lately following China’s relaxation of its strict COVID-19 curbs which had been dampening consumption and industrial activity since the start of the pandemic.
China last week said the worst was over in its battle against COVID-19, and a prominent government epidemiologist said over the weekend that the likelihood of a large-scale rebound in COVID-19 cases in the near future is remote.
Asian equities extended their winning run and scaled their highest levels in seven months on Wednesday, supported by gains in South Korean stocks, while a shock surge in inflation data pushed the Australian dollar to multi-month highs.
The front-month rubber contract on Singapore Exchange’s SICOM platform for February delivery last traded at 144.3 US cents per kg, up 1.5%.