TOKYO: Japanese rubber futures closed at a two-week high on Thursday after the Bank of Japan (BoJ) slightly upgraded its outlook for the world's third-largest economy, which has slumped amid the Covid-19 pandemic.

Osaka Exchange's rubber contract for February delivery finished 0.7 yen, or 0.4%, higher at 185.3 yen per kg. It was the highest close since Sept. 2.

The rubber contract on the Shanghai futures exchange for January delivery fell 0.3% to finish at 12,360 yuan per tonne.

"Japan's economy remains in a severe state but has started to pick up as business activity gradually resumes," the BoJ said. In July, it had assessed the economy was in an "extremely severe state." Aiding sentiment was Japan's new prime minister, Yoshihide Suga, who had pledged to contain Covid-19 and push reforms after retaining about half of predecessor Shinzo Abe's lineup in his cabinet.