SINGAPORE: Japanese rubber futures rose on Wednesday as stronger-than-expected manufacturing activity growth in top buyer China lifted demand sentiment.

Osaka Exchange’s rubber contract for August delivery finished 3.3 yen, or 1.5%, higher at 227.5 yen ($1.67) per kg.

The rubber contract on the Shanghai Futures Exchange for May delivery rose 70 yuan to finish at 12,560 yuan ($1,820) per tonne.

Japan’s benchmark Nikkei share average closed 0.26% higher. China’s factory activity grows further, marking its highest reading in nearly 11 years. This indicates China’s recovery is still on track, providing slight confidence to rubber prices, said a Singapore-based trader.

China’s manufacturing activity expanded at its fastest pace in more than a decade in February, an official index showed on Wednesday, smashing expectations as production zoomed after the lifting of COVID-19 restrictions late last year.

Similarly, a private sector survey showed that China’s factory activity rose for the first time in seven months in February, driven by a renewed upturn in production, and new orders and revived customer demand as the country shook off its strict COVID curbs.