Key Tokyo rubber futures eased on Monday, hurt by the yen's rise against the dollar resuming, but a recovery in oil prices helped the market pare earlier losses. The benchmark rubber contract on the Tokyo Commodity Exchange for January delivery inched down 0.8 yen or 0.3 percent to settle at 280.0 yen per kg. Oil prices rose towards $76 on Monday, boosted by the weaker greenback, while a fall in Asian stock markets on news of a slowdown in Japan's economic growth capped gains.
Japan's growth slowed markedly in April-June and analysts predict a further slowdown, adding to policymakers' difficulties as they grapple with deflation and a rise in the yen that threatens an export-reliant recovery. The Nikkei average fell 0.6 percent, with investors eyeing the yen's impact on corporate profits should the currency strengthen further. The euro recovered from near one-month lows against the dollar on Monday, aided by a bounce in equity markets, but rallies were hampered by sovereign sales and concerns about the eurozone periphery.
Against the yen, the dollar fell 0.4 percent, dampening sentiment for investors in rubber futures as a higher yen deflates yen-priced TOCOM prices. Asian physical rubber prices were mostly unchanged on Monday as limited supply in producing countries offset slight falls in TOCOM futures contract prices.