SINGAPORE: Japanese rubber futures climbed on Friday on a weaker yen and strong performances in the Nikkei index, while higher oil prices also lent support, although the market was still headed for a second consecutive weekly decline.
The Osaka Exchange (OSE) rubber contract for July delivery was up 2.3 yen, or 0.83%, at 279.9 yen ($1.87) per kg, as of 0200 GMT.
The contract has lost 1% so far this week.
Japan’s Nikkei share average reached 37,000 for the first time since Feb. 20, 1990 on Thursday, as tech stocks followed their Wall Street peers higher and a weaker yen lifted overall sentiment.
The Japanese yen wallowed near a 10-week low on Friday, while the dollar was poised towards a fourth weekly advance as traders dialled back bets on how quickly the Bank of Japan will raise interest rates and how soon the Federal Reserve will cut them.
A weaker currency makes yen-denominated assets more affordable to overseas buyers.
Japan rubber futures drop
Oil prices extended gains on Friday and were on track for a weekly gain as tensions in the Middle East loomed following Israel’s rejection of a ceasefire offer from Hamas.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
China’s central bank on Thursday said it would keep policy flexible and precise to boost domestic demand, while maintaining price stability.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.4% from last Friday, the exchange said on Thursday.
Mainland China markets will be closed from Friday, Feb. 9, through Friday, Feb. 16, for the Lunar New Year holidays, and will resume trade on Monday, Feb. 19.