Japan futures rebound on Beijing’s stimulus and strong data
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Japanese futures climbed on Tuesday, driven by improved economic data from China and renewed optimism over fresh government stimulus to boost domestic consumption. The Osaka Exchange August rubber contract advanced 1.58% to 346.9 yen per kg, reflecting strong demand expectations amid a supply-constrained market.
Investor sentiment improved following reports that China’s industrial output expanded 5.9% year-over-year in the first two months of 2025, surpassing market expectations of 5.3%. Additionally, comments from U.S. President Donald Trump hinting at a potential visit by Chinese President Xi Jinping fueled speculation that trade tensions between the two economic giants could ease, further supporting risk appetite.
The broader Hong Kong stock market also surged to a three-year high, reflecting confidence in Beijing’s pro-growth measures. However, traders remain cautious due to an accumulation of Qingdao’s total spot inventory, which has expanded month-over-month, according to a note from Hexun Futures.
Meanwhile, global rubber supply remains constrained as major producing regions enter their seasonal low-output period, which runs from February to May. Market participants are closely monitoring weather conditions, particularly in Thailand, where strengthening eastern and southeastern winds from March 18-20 are expected to bring heavy rains, potentially affecting raw material availability.
On the Shanghai Futures Exchange, May butadiene rubber contracts saw a 1.28% increase, reflecting optimism about demand stability. However, the SHFE May rubber contract slipped 0.12%, indicating some uncertainty regarding near-term inventory trends.
With supply-side concerns persisting and China’s stimulus measures providing demand-side support, Japanese rubber futures could see continued price stability. However, any further accumulation of spot inventories or an abrupt shift in China’s economic trajectory could introduce volatility in the coming sessions.
Investor sentiment improved following reports that China’s industrial output expanded 5.9% year-over-year in the first two months of 2025, surpassing market expectations of 5.3%. Additionally, comments from U.S. President Donald Trump hinting at a potential visit by Chinese President Xi Jinping fueled speculation that trade tensions between the two economic giants could ease, further supporting risk appetite.
The broader Hong Kong stock market also surged to a three-year high, reflecting confidence in Beijing’s pro-growth measures. However, traders remain cautious due to an accumulation of Qingdao’s total spot inventory, which has expanded month-over-month, according to a note from Hexun Futures.
Meanwhile, global rubber supply remains constrained as major producing regions enter their seasonal low-output period, which runs from February to May. Market participants are closely monitoring weather conditions, particularly in Thailand, where strengthening eastern and southeastern winds from March 18-20 are expected to bring heavy rains, potentially affecting raw material availability.
On the Shanghai Futures Exchange, May butadiene rubber contracts saw a 1.28% increase, reflecting optimism about demand stability. However, the SHFE May rubber contract slipped 0.12%, indicating some uncertainty regarding near-term inventory trends.
With supply-side concerns persisting and China’s stimulus measures providing demand-side support, Japanese rubber futures could see continued price stability. However, any further accumulation of spot inventories or an abrupt shift in China’s economic trajectory could introduce volatility in the coming sessions.