Tokyo rubber futures staged a modest rally on Monday after falling more than one percent late last week, drawing support from firm crude oil prices. The most-active rubber contract on the Tokyo Commodity Exchange for January delivery rose 1.4 yen a kg to 259.4 yen.
US crude futures settled up $2.07, or 2.76 percent at $77.02 a barrel on Friday, the second-highest settlement on record, on strong US economic data. Nymex crude for September delivery was trading at $76.68 in Globes electronic trading, slipping slightly in profit taking.
Strong crude oil prices often help lift rubber because investors believe expensive oil will encourage a shift to natural rubber from synthetic rubber, a petroleum product.
The dollar was trading at around 118.41 yen against about 118.61 in late US trade on Friday, holding above the 3-month low of 118.02 struck last week. Analysts said the fallout from the crushing defeat of Japan's ruling Liberal Democratic Party in upper house elections on Sunday was negative for the yen, but would take a back seat to worries about a sharp fall in stocks and corporate bonds.
Supply concerns provided support after the chairman of the Rubber Association of Indonesia said last week that output in Indonesia, the world's second-largest producer, is expected to grow less than 5 percent this year due to erratic weather.
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