SINGAPORE, Oct 22 (Reuters) –
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Japanese rubber futures edged higher on Tuesday, as a stable demand outlook outweighed prospects of easing supply pressures, while a weaker yen also lent support to prices.
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The March Osaka Exchange (OSE) rubber contract JRUc6, 0#2JRU: was up 0.6 yen, or 0.15%, at 389.6 yen ($2.59) per kg, as of 0212 GMT.
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The January rubber contract on the Shanghai Futures Exchange (SHFE) SNRv1 rose 120 yuan, or 0.66%, to 18,185 yuan ($2,553.25) per metric ton.
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While rubber tapping disrupted by Typhoon Yagi has resumed, downstream tyre factory operations are stable and improving, with capacity utilisation up significantly after the Golden Week holidays, Chinese financial site Guohai Liangshi Futures said in a note.
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With the softening of overseas raw material prices and the negative impact of a delay in a key EU deforestation law, supply-side support has subsided. Rubber prices are now fluctuating while waiting for new drivers, Guohai Liangshi said.
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The yen JPY=EBS hovered close to a two-and-a-half-month low. The yield on the benchmark U.S. 10-year Treasury note US10YT=RR rose to a 12-week high on Monday, weighing on the Japanese currency which is extremely sensitive to moves in Treasuries.
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A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. FRX/
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Oil prices fell, paring the previous day’s nearly 2% rise as the top U.S. diplomat renewed efforts to push for a ceasefire in the Middle East, and as slow demand in top oil importer China continued to weigh on the market. O/R
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Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
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The front-month November rubber contract on Singapore Exchange’s SICOM platform STFc1 last traded at 196.2 U.S. cents per kg, up 0.3%.
($1 = 150.6900 yen)
($1 = 7.1223 yuan)
Reporting by Gabrielle Ng; Editing by Subhranshu Sahu
