Japan futures hit over one-year low amid intensifying tariff crisis
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Japanese futures experienced sharp declines on Monday, dropping to their lowest levels in more than a year, as market turbulence intensified following the imposition of extensive new tariffs by the United States. The significant downturn underscores growing investor concerns about deteriorating global trade relations and their potential impact on economic growth and commodity demand.
Rubber futures notably led the declines, with the Osaka Exchange’s (OSE) September rubber contract plunging by 8.33%, marking its steepest daily loss since November 4, 2020. The contract closed the morning session down 26.7 yen at 294 yen ($2.02) per kg, after earlier touching a low not seen since February 2024.
In China, similar patterns emerged, reflecting broader regional anxiety. The Shanghai Futures Exchange’s (SHFE) May rubber contract dropped by 6% to 15,580 yuan ($2,132.46) per metric ton, while the May butadiene rubber contract on the same exchange fell 7%, reaching 12,555 yuan ($1,718.43) per metric ton. These pronounced losses are largely attributed to market panic rather than underlying fundamentals or technical indicators, as indicated by industry analysts.
Further exacerbating the negative sentiment, China's government retaliated against U.S. tariffs by imposing reciprocal levies of 34% on American goods and restricting exports of strategic rare earth materials. These measures compounded investor fears, particularly impacting sentiment in commodities and equities across Asian markets.
Japan's benchmark Nikkei 225 Index was not spared from the turmoil, dropping 6.6% to reach its lowest point since late 2023. This decline aligns with a broader regional sell-off, fueled by the Trump administration’s recent tariff policies, which erased approximately $6 trillion in market value from U.S. stocks over the past week.
Currency markets mirrored these developments, with traders gravitating towards safe-haven assets such as the Japanese yen. Consequently, the USD/JPY pair dropped by 0.63% to 145.92, increasing the relative expense for foreign buyers of yen-denominated commodities.
Market participants suggest that identifying clear support levels remains challenging amid the current volatility. Traders should monitor developments closely, as stabilization in broader equities and commodities could signal opportunities for strategic positioning.
The front-month May rubber contract on Singapore Exchange's SICOM platform last traded at 165.9 U.S. cents per kg, down significantly by 8.5%, further highlighting the pervasive bearish sentiment.
Overall, traders and investors must stay alert to ongoing geopolitical developments and prepare for continued volatility driven by tariff-related uncertainty.
Rubber futures notably led the declines, with the Osaka Exchange’s (OSE) September rubber contract plunging by 8.33%, marking its steepest daily loss since November 4, 2020. The contract closed the morning session down 26.7 yen at 294 yen ($2.02) per kg, after earlier touching a low not seen since February 2024.
In China, similar patterns emerged, reflecting broader regional anxiety. The Shanghai Futures Exchange’s (SHFE) May rubber contract dropped by 6% to 15,580 yuan ($2,132.46) per metric ton, while the May butadiene rubber contract on the same exchange fell 7%, reaching 12,555 yuan ($1,718.43) per metric ton. These pronounced losses are largely attributed to market panic rather than underlying fundamentals or technical indicators, as indicated by industry analysts.
Further exacerbating the negative sentiment, China's government retaliated against U.S. tariffs by imposing reciprocal levies of 34% on American goods and restricting exports of strategic rare earth materials. These measures compounded investor fears, particularly impacting sentiment in commodities and equities across Asian markets.
Japan's benchmark Nikkei 225 Index was not spared from the turmoil, dropping 6.6% to reach its lowest point since late 2023. This decline aligns with a broader regional sell-off, fueled by the Trump administration’s recent tariff policies, which erased approximately $6 trillion in market value from U.S. stocks over the past week.
Currency markets mirrored these developments, with traders gravitating towards safe-haven assets such as the Japanese yen. Consequently, the USD/JPY pair dropped by 0.63% to 145.92, increasing the relative expense for foreign buyers of yen-denominated commodities.
Market participants suggest that identifying clear support levels remains challenging amid the current volatility. Traders should monitor developments closely, as stabilization in broader equities and commodities could signal opportunities for strategic positioning.
The front-month May rubber contract on Singapore Exchange's SICOM platform last traded at 165.9 U.S. cents per kg, down significantly by 8.5%, further highlighting the pervasive bearish sentiment.
Overall, traders and investors must stay alert to ongoing geopolitical developments and prepare for continued volatility driven by tariff-related uncertainty.