Tokyo rubber futures bounced back to rise more than 1 percent on Wednesday, as steady oil prices and a softer yen encouraged buying. The benchmark Tokyo Commodity Exchange rubber contract for August delivery rose as high as 286.9 yen per kg, up 4.5 yen or 1.6 percent.
It was trading at 286.4 yen, up 4.0 yen. Oil prices hovered above $108 per barrel on Wednesday, although it was down more than $1 from the previous day, paring some of Tuesday's 3.5 percent jump ahead of US government data that is expected to show rising crude and gasoline stocks.
Rubber prices often benefit from high crude oil prices because investors believe expensive oil will encourage a shift to natural rubber from synthetic rubber, a petroleum product."
The dollar posted its largest single-day gain against the yen in nine years on Tuesday and rallied against the euro after the Federal Reserve cut the benchmark US interest rate by a less-than-expected 75 basis points to 2.25 percent. The US currency fell slightly on Wednesday, and was trading at around 99.92, compared to late US levels the previous day of 100.06 yen.