Japanese rubber futures rose for a fourth session on Thursday amid weather concerns in top producer Thailand and higher oil prices, although a stronger yen capped gains.
The Osaka Exchange (OSE) rubber contract for October delivery TRB1 was up 0.2 yen, or 0.06%, at 317.4 yen ($2.06) per kg, as of 0157 GMT.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery RSS31! was up 155 yuan, or 1.08%, at 14,535 yuan ($2,015.17) per metric ton.
Thailand’s meteorological agency warned of “severe weather conditions”, “heavy to very heavy rains” and “flash floods” from May 16-21, potentially causing crop damage.
Oil prices extended gains on signs of stronger demand in the U.S. where data showed slower inflation than markets expected, strengthening the argument for an interest rate cut which could result in even stronger demand.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
The Japanese yen USDJPY strengthened as much as 0.6% to 153.68 against the dollar on Thursday. A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Japan’s economy contracted in the first quarter, squeezed by weaker consumption and external demand and throwing a fresh challenge to policymakers as the central bank looks to lift interest rates away from near-zero levels.
China is considering a plan for local governments nationwide to buy millions of unsold homes, Bloomberg News said on Wednesday.
China listed 99 new energy vehicle models in a government-backed campaign to promote sales in rural areas, the Ministry of Industry and Information Technology said on Wednesday.
The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery TF1! last traded at 167.1 U.S. cents per kg, up 0.6%.
($1 = 153.9800 yen)
($1 = 7.2128 yuan)
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