SINGAPORE: Japanese rubber futures hit a more than one-week high on Monday, buoyed by adverse weather woes in top producer Thailand, although a stronger yen and lower oil prices capped gains.

The Osaka Exchange (OSE) rubber contract for January delivery was up 3.6 yen, or 1.14%, at 318.9 yen ($2.20) per kg as of 0200 GMT.

It hit an intraday high of 319.4 yen, its strongest level since July 25.

The January rubber contract on the Shanghai Futures Exchange (SHFE) rose 110 yuan, or 0.7%, to 15,750 yuan ($2,204.65) per metric ton.

Thailand’s meteorological agency reported abundant rainfall over upper Thailand from July 26 to Aug. 1, with heavy to very heavy rainfall and flooding in several areas.

Although Southeast Asian production areas continuously harvested from May to June, weather disruptions led to low upstream output, high raw material prices, and delayed delivery of some goods, said Chinese consultancy JLC.

Japan’s yen hit mid-January highs against the dollar on Monday, as markets extended moves triggered last week after weak U.S. labour data stoked recession worries and expectations of deeper rate cuts by the Federal Reserve.

Japanese rubber climbs on supply concerns

The safe-haven and carry-funding favourite, the yen, traded at 145.43 versus the dollar, up 0.8%, after hitting a peak of 145.28.

A stronger currency makes yen-denominated assets less affordable to overseas buyers.

Oil prices hovered at eight-month lows as fears of a recession in the U.S., the world’s top oil consumer, offset concerns that escalating Middle East tensions may affect supplies from the largest producing region.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.

The front-month September rubber contract on Singapore Exchange’s SICOM platform last traded at 169.9 U.S. cents per kg, up 1.5%.