The key Tokyo rubber futures contract rose 5 percent on Monday as a rally in Japanese shares helped ease concerns that a global recession would hit demand, while a weaker yen inflates the yen-based futures prices. The most active April 2009 contract on the Tokyo Commodity Exchange traded at 192.1 yen as of 0050 GMT, up 9.6 yen or 5 percent from Friday's close.
The Tokyo market was closed on Monday for a national holiday. The contract earlier rose as high as 193.9 yen, the highest for any benchmark since October 24. Last week the TOCOM rubber market took a hit as investors fled riskier assets including commodities due to concerns about a credit crunch, sending rubber as low as 153.4 yen, the lowest level since July 2005.
The dollar gained ground ahead of the US presidential election. The dollar stood around 99.05 yen, having recovered from a 13-year low below 91 yen marked last month. Japan's benchmark Nikkei share average rose about 4 percent in early trade. News about steps to curb rubber production has had little impact on the TOCOM market.
The world's top three rubber producing countries agreed on Friday to cut output by 3 percent next year in a bid to shore up prices hit by dwindling demand and growing fears of a global recession. Tokyo rubber futures are expected to tumble further in November due to demand sapped by falling auto sales and fears of a global economic recession, a Reuters poll showed on Monday.
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