Tokyo rubber futures posted solid gains on Wednesday as wariness about physical supply shortages and a weaker yen induced steady technical buying in the longer end of the market, traders said.
Technical trading dominated activity throughout the day as the market lacked distinct market-moving factors, they said.
The November rubber contract on the Tokyo Commodity Exchange (TOCOM) finished up 2.3 yen per kg at 154.1. The spot June contract rose 0.6 yen to 156.1. The remaining contracts ended up 1.0 to 1.8 yen.
The market remained in backwardation amid few physical supplies, but the difference between the prompt June contract and the distant November contract narrowed to 2.0 yen compared with 3.7 yen on Tuesday.
"Technical signals suggest that recent falls in distant contracts were a bit overdone so traders covered their positions by factoring in today's weaker yen," said a manager at a Japanese commodities brokerage.
"With supply concerns still there, the current backwardation situation will continue," the manager said. A bullish global economic outlook has kept rubber prices supported but traders remain hungry for fresh incentives and they relied on the dollar for near-term direction.
The market's near-term focus is on a meeting of the Organisation of Petroleum Exporting Countries (OPEC) and US employment data later in the week that could determine the outlook for the dollar/yen rate.
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