Japanese rubber futures rose on Wednesday, buoyed by prospects of stimulus measures in both Japan and China, while the yen hovered near a one-year low, making assets denominated by the currency more affordable for overseas buyers.
The Osaka Exchange (OSE) rubber contract for March delivery was up 7 yen, or 2.7%, at 265.4 yen ($1.77) per kg at closing. The rubber contract on the Shanghai futures exchange (SHFE) for January delivery was up 245 yuan, or 1.7%, at 14,730 yuan ($2,014.36) per metric ton. China, a top consumer of rubber, is set to unleash fresh fiscal stimulus to shore up its economic recovery, drawing on a well-used playbook that relies heavily on debt and state spending.
China’s top parliament body has approved a 1 trillion yuan ($137 billion) sovereign bond issue and passed a bill to allow local governments to frontload part of their 2024 bond quotas, state media said on Tuesday.
Japan’s government is considering spending around $33 billion for payouts to low-income households and an income tax cut in a package of measures to cushion the blow to households from rising living costs, the Nikkei newspaper reported on Wednesday.
The Japanese yen was flat against the dollar and last traded at 149.9, but stayed pinned near the 150 threshold. Traders see the 150 threshold as a possible line-in-the-sand for Japanese authorities to intervene in the currency market.
Japan’s benchmark Nikkei average closed up 0.67%. China helped Asian stocks rise from 11-month lows on Wednesday as investors cheered the approval of a trillion-yuan sovereign issue as a harbinger of stimulus, while the Aussie dollar jumped after hotter-than-expected inflation lifted rate forecasts.
Read more at Business Recorder