BEIJING: Japanese rubber futures rose more than 2% on Wednesday, the biggest daily rise in over two months, buoyed by bets of supply tightness in the first quarter of next year and stronger crude futures.

The Osaka Exchange (OSE) rubber contract for May delivery closed 2.95% higher, or 6.9 yen, at 240.5 yen per kg, the highest closing since Dec. 12. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was 155 yuan, or 1.14% higher, at 13,715 yuan per metric ton.

“Market sentiment is supported by improving economic outlook for the US and EU area, potential tight supply emerging globally by March 2024, and a softer dollar,” said Jom Jacob, co-founder of India-based analysis firm What Next Rubber.

However, sentiment for natural rubber is weighed down by persistent weakness in the demand from China, Jacob said. Japan’s Nikkei closed at a more than five-month high on Wednesday as caution on the Bank of Japan’s (BOJ) policy stance faded after the central bank offered no hints on when it would exit its negative rate policy.