Japan rubber futures rise on firmer oil prices

SINGAPORE: Japanese rubber futures inched higher on Monday, supported by firmer oil prices and expectations that Europe will announce policy support for local automakers, though gains were capped by a stronger yen.

The Osaka Exchange (OSE) rubber contract for May delivery was up 2 yen, or 0.61 percent, at 327.4 yen (USD2.11) per kg.

The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery dipped 5 yuan, or 0.03 percent, to 15,065 yuan (USD2,131.32) per metric ton.

The most-active January butadiene rubber contract on the SHFE gained 75 yuan, or 0.72 percent, to 10,530 yuan per ton.

The European Commission could announce a package to support the local automotive sector, including a possible watered down version of its 2035 combustion engine phase-out, on December 16, Reuters reported, citing an industry source.

This comes as car makers have struggled with lower-than-expected dem-and for battery electric vehicles and fierce competition from China.

Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.

The yen found footing at 155.21 per dollar after sliding through November.

A stronger Japanese currency makes yen-denominated assets less affordable to overseas buyers.

Oil prices hovered at two-week highs as investors expect a US Federal Reserve interest rate cut this week that will lift economic growth and energy demand.

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