SHANGHAI: Japanese rubber futures extended gains on Friday and recorded a third straight weekly rise on firmer oil prices and a weaker yen.

The Osaka Exchange (OSE) rubber contract for October delivery was up 2.6 yen, or 0.63percent, at 413.6 yen (USD2.64) per kg, with the contract gaining 0.85percent this week.

The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery dipped 55 yuan, or 0.31percent, to 17,830 yuan (USD2,621.02) per metric ton.

The most-active June butadiene rubber contract on the SHFE fell 545 yuan, or 3.43percent, to 15,335 yuan per ton.

Prices of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) was up 1.42 percent, while block rubber was 0.35percent lower.

The yen was set to end the week around 156.90 per dollar after purported government intervention sent it to around 155 earlier this week.

A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. Oil prices rose on Friday after renewed fighting broke out between the United States and Iran, threatening a shaky ceasefire and dashing hopes for progress to reopen the Strait of Hormuz, a key transit route for oil and liquefied natural gas.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.

Transaction volume was low for the Japanese rubber contract on Friday, LSEG-compiled data showed, and exacerbating price movements.

Rubber prices are expected to rise further due to likely supply shortages as top producer Thailand’s meteorological agency warned of storms until May 12 and cautioned farmers about crop damage and flash floods.

The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 220.5 US cents per kg, down 0.9percent, as of 0721 GMT.—Reuters