SINGAPORE: Japanese rubber futures inched higher on Tuesday, tracking a stronger Shanghai market, while a softer yen against the US dollar offered some support.

The Osaka Exchange rubber contract for October delivery finished up 0.9 yen, or 0.4%, at 244.9 yen ($1.89) per kg.

“There is optimism that the COVID situation in Shanghai is improving,” said a Singapore-based trader.

Demand for RSS3 grade rubber in China, however, is still weak due to the lockdowns, another trader said.

The dollar traded at 129.50 yen, compared with 128.98 on Monday. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.

The rubber contract on the Shanghai futures exchange for September delivery gained 80 yuan to finish at 13,070 yuan ($1,935.69) per tonne, after hitting the highest since April 22 of 13,135 yuan earlier in the session.

Shanghai achieved on Tuesday the long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones but most residents will have to put up with confinement for a while longer before resuming more normal life.

The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 161.8 US cents per kg, up 1.6%.