SINGAPORE: Japanese rubber futures reversed early losses on Thursday, buoyed by a rally in the domestic stock market, while a weak yen and firm oil prices also lent support.

The Osaka Exchange (OSE) rubber contract for December delivery gained 3.6 yen, or 1.11%, to finish at 327.9 yen ($2.03) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery closed up 40 yuan, or 0.27%, at 14,685 yuan ($2,019.56) per metric ton. Japan’s Nikkei share average surged to an all-time high, crossing the 42,000 mark for the first time as an overnight rally in US stocks boosted investor sentiment.

The yen was adrift, but continued to be pressured by stark interest rate differentials between the US and Japan. It was last at 161.67 per dollar, near a 38-year low. A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers.

Oil prices gained as crude stocks fell after US refineries ramped up processing and as gasoline inventories eased, signalling stronger demand. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.