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Japanese futures set for fourth monthly decline on weak China demand



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SINGAPORE, May 31 (Reuters) -

  • Japanese rubber futures dipped for a second session on Wednesday, as confidence in China's recovery momentum continued to falter amid dismal factory data, while a plunge in crude oil prices dragged the contract lower.

  • The Osaka Exchange (OSE) rubber contract for November delivery JRUc6, 0#2JRU: was down 0.8 yen, or 0.4%, at 208.2 yen ($1.54) per kg, as of 0220 GMT.

  • The benchmark OSE contract is poised for a fourth consecutive monthly drop, losing 0.2% so far this month.

  • The rubber contract on the Shanghai futures exchange (SHFE) for September delivery SNRv1 was down 10 yuan, or 0.1%, at 11,880 yuan ($1,718.73) per tonne.

  • Japan's benchmark Nikkei average .N225 opened 0.87% lower, retreating from a 33-year high scaled in the previous session. .T

  • China's factory activity contracted faster than expected in May on weakening demand, while profit at China's industrial firms slumped in the first four months of 2023, heaping pressure on policymakers to shore up a patchy economic recovery and knocking Asian financial markets lower.

  • Japan's factory output in April fell 0.4% from the previous month, government data showed on Wednesday, less than the median market forecast for a 1.5% gain.

  • Oil prices extended losses on Wednesday, following a more than 4% drop in the prior session. Lower oil prices incentivise manufacturers to shift to synthetic rubber, which is derived from oil, hindering the natural rubber market. O/R

  • Legislation brokered by U.S. President Joe Biden and House Speaker Kevin McCarthy to lift the $31.4 trillion debt ceiling and achieve new federal spending cuts passed an important hurdle late on Tuesday, advancing to the full House of Representatives for debate and an expected vote on passage on Wednesday.

  • The front-month rubber contract on Singapore Exchange's SICOM platform for June delivery STFc1 last traded at 133.0 U.S. cents per kg, down 0.3%.

($1 = 135.0500 yen)

($1 = 6.9121 yuan)



Reporting by Carman Chew; Editing by Sherry Jacob-Phillips

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