Tokyo rubber futures rose more than 2 percent to top 200 yen on Wednesday, though they later trimmed gains as the yen inched up on the dollar. The Tokyo Commodity Exchange rubber contract for March delivery was at 199.1 yen per kg at 0357 GMT, up 1.9 yen or nearly 1 percent from the previous day's close. The benchmark contract rose to a high of 202.3 yen, the highest since September 18.
A Tokyo-based broker said there was vague talk that China may be looking to buy rubber to add to its national stockpile, which he said was providing Tokyo rubber prices a boost. "It's something we still need to check whether this is really the case or not," he said. But others said they had not heard of any such buying by China.
"I've heard nothing about Chinese buying. In fact, Chinese demand is so bad and it's so difficult to sell SIR right now," said a dealer in Indonesia's main growing island of Sumatra. "If the Chinese are buying rubber to boost stockpiles, the prices should go up. I've heard that local prices are very cheap in China right now," the dealer said.
In domestic news, Japan's crude rubber inventories totalled 6,654 tonnes as of September 10, down roughly 0.9 percent from 10 days earlier, data from the Rubber Trade Association of Japan showed. The dollar slipped against the yen on Wednesday, but remained off eight-month lows hit earlier this week, as Japanese exporters sold the US currency to settle business before the quarter ends later in the day.
Oil prices rose above $67 per barrel on Wednesday, bouncing back from the previous day's losses, as the dollar weakened against the euro and resource currencies like the Australian dollar. China's eight-day National Day holiday starts on Thursday.