Japanese rubber futures extend gains on weaker yen

The Osaka Exchange (OSE) rubber contract for July delivery was up 3.9 yen, or 1.13 percent, at 348.1 yen (USD2.22) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery fell 140 yuan, or 0.86 percent, to 16,175 yuan (USD2,330.46) per metric ton. The most-active March butadiene rubber contract on the SHFE fell 460 yuan, or 3.45 percent, to 12,855 yuan (USD1,852.12) per ton.

The yen weakened above 157 against the dollar, setting it up for a fourth consecutive day of losses ahead of elections that are expected to boost Prime Minister Sanae Takaichi’s fiscal and defence-spending ambitions. A softer Japanese currency makes yen-denominated assets more affordable to overseas buyers.

Ivory Coast’s rubber exports in January declined 1.8 percent month-on-month, which could push up spot rubber prices, according to a note from Chinese financial information site Tonghuashun. Most rubber-producing regions in Southeast Asia, except Southern Thailand, have largely wrapped up rubber tapping as crops enter an off-season, according to a note from Chinese broker Zhongcai Futures.

Rubber crops usually undergo a season of low production from February to May, before entering a peak harvesting period that lasts until September.

Meanwhile, top consumer China’s natural rubber inventories increased 1.88percent week-on-week. Though operating rates of tyre factories remain steady, several factories are set to undergo planned maintenance next week, tempering the demand for feedstock, according to a note by Shanghai Zhongqi Futures.

The front-month rubber contract on Singapore Exchange’s SICOM platform for March delivery last traded at 188.1 US cents per kg, down 0.9 percent as of 0700 GMT.