Japan futures extend losses amid strong yen and U.S. tariff concerns
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Japanese rubber futures declined for a third consecutive session on Wednesday, pressured by a stronger yen and growing concerns over potential U.S. tariffs on automobile imports. The Osaka Exchange (OSE) rubber contract for August delivery closed 1.9% lower at 361 yen ($2.42) per kg, after touching a session low of 359.2 yen—the weakest level since January 9.
Market sentiment remains fragile as the yen strengthened, with the U.S. dollar rising 0.3% to 149.41 yen in early Asian trading. A stronger currency makes yen-denominated commodities more expensive for foreign buyers, reducing demand and putting downward pressure on prices. The impact is particularly notable in rubber, a key input for Japan’s auto sector, which is already facing headwinds from trade uncertainty.
Concerns over U.S. tariffs on automobile imports have further dampened investor confidence. Japan’s automobile industry association has urged the government to negotiate protections for Japanese automakers after former President Donald Trump recently reiterated his plan to impose a 25% tariff on imported cars. The prospect of higher trade barriers has cast a shadow over the global automotive industry, with European car sales also declining in January. Tesla shares tumbled 8.39% following the news, reflecting broader concerns about the sector’s outlook.
In China, rubber futures followed Japan’s downward trend. The Shanghai Futures Exchange (SHFE) May delivery rubber contract slipped 1.65% to 17,600 yuan ($2,424.74) per metric ton, while the butadiene rubber contract edged up slightly by 0.69% to 13,810 yuan ($1,902.60) per metric ton. Singapore’s SICOM front-month rubber contract for March delivery also fell 1.3% to 200 U.S. cents per kg.
Despite the bearish sentiment, supply-side constraints could provide some support in the medium term. China’s financial data provider Tonghuashun Information noted that natural rubber production is entering a seasonal low period. Additionally, Thailand’s meteorological agency has warned of isolated thundershowers in the South between February 26 and March 4, which could potentially impact rubber plantations and tighten supply.
For now, the market remains under pressure as currency fluctuations and trade policy uncertainty weigh on sentiment. Investors will be watching upcoming U.S. trade decisions closely, as any concrete tariff measures could further impact Japanese exports and demand for rubber in the auto industry.
Market sentiment remains fragile as the yen strengthened, with the U.S. dollar rising 0.3% to 149.41 yen in early Asian trading. A stronger currency makes yen-denominated commodities more expensive for foreign buyers, reducing demand and putting downward pressure on prices. The impact is particularly notable in rubber, a key input for Japan’s auto sector, which is already facing headwinds from trade uncertainty.
Concerns over U.S. tariffs on automobile imports have further dampened investor confidence. Japan’s automobile industry association has urged the government to negotiate protections for Japanese automakers after former President Donald Trump recently reiterated his plan to impose a 25% tariff on imported cars. The prospect of higher trade barriers has cast a shadow over the global automotive industry, with European car sales also declining in January. Tesla shares tumbled 8.39% following the news, reflecting broader concerns about the sector’s outlook.
In China, rubber futures followed Japan’s downward trend. The Shanghai Futures Exchange (SHFE) May delivery rubber contract slipped 1.65% to 17,600 yuan ($2,424.74) per metric ton, while the butadiene rubber contract edged up slightly by 0.69% to 13,810 yuan ($1,902.60) per metric ton. Singapore’s SICOM front-month rubber contract for March delivery also fell 1.3% to 200 U.S. cents per kg.
Despite the bearish sentiment, supply-side constraints could provide some support in the medium term. China’s financial data provider Tonghuashun Information noted that natural rubber production is entering a seasonal low period. Additionally, Thailand’s meteorological agency has warned of isolated thundershowers in the South between February 26 and March 4, which could potentially impact rubber plantations and tighten supply.
For now, the market remains under pressure as currency fluctuations and trade policy uncertainty weigh on sentiment. Investors will be watching upcoming U.S. trade decisions closely, as any concrete tariff measures could further impact Japanese exports and demand for rubber in the auto industry.