Japanese rubber futures rise on weaker yen

SHANGHAI: Japanese rubber futures rose for the fifth consecutive session on Monday as the yen hit a one-and-a-half-year low, while rising oil prices also lent support.

The Osaka Exchange (OSE) rubber contract for September delivery was up 6.5 yen, or 1.74percent, at 380.7 yen (USD2.38) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery gained 40 yuan, or 0.24percent, to 16,540 yuan (USD2,395.05) per metric ton. The most-active May butadiene rubber contract on the SHFE fell 435 yuan, or 2.4percent, to 17,725 yuan per ton. The yen firmed to 159.97 per dollar after hitting 160.47 earlier in the session, its weakest level since July 2024 when Tokyo last intervened in the currency markets. Japanese authorities have hence declared their readiness to intervene if speculative moves continue in the foreign exchange market.

A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. Oil prices extended gains on Monday, with Brent headed for a record monthly rise, after Yemeni Houthis launched their first attacks on Israel over the weekend, widening the US-Israel war with Iran in the Middle East. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.

Global rubber futures ended last week higher across all major exchanges, supported by strong physical demand and speculative buying, the Japan Exchange Group said in a report on Monday. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange remained unchanged week-on-week, the exchange said on Friday. The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last traded at 200 US cents per kg, up 0.1percent, as of 0700 GMT.