Tokyo rubber futures rose across the board to this week's high on Wednesday on sporadic short-covering led by dealers, but the underlying trend stayed weak as the market remained reluctant to chase rubber on rallies.
Traders said market players lacked incentives to buy rubber aggressively, with sentiment undermined by views that Chinese buying could slow if the country takes monetary steps to cool its economy.
The benchmark October contract closed at the day's high of 151.5 yen per kg. It was up 3.5 yen from Tuesday's settlement of 148.0 yen. Sporadic short covering has emerged since the key October contract dropped to a three-month low of 146.4 yen per kg in the week, traders said.
"Rubber rose purely on technical short-covering, but the market needs fresh buying factors to extend bids," said a senior trader at a Japanese trading house. "Concerns over slower demand from China were also negative for the market," he said.
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