SINGAPORE: Japanese rubber futures extended gains on Wednesday to hit their highest in nearly two weeks, buoyed by supply-side pressures in top producer Thailand and a weaker yen.

The Osaka Exchange (OSE) rubber contract for January delivery closed up 6.3 yen, or 1.98%, at 319.9 yen ($2.19) per kg. The contract hit an intraday high of 321.5 yen, its strongest level since July 25. The January rubber contract on the Shanghai Futures Exchange (SHFE) rose 135 yuan, or 0.87%, to 15,700 yuan ($2,187.06) per metric ton. While supply from major producing countries is falling short of expectations, demand prospects are going beyond earlier expectations, driving an uptrend in natural rubber markets across Asia, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.

Thailand’s meteorological agency reported abundant rainfall over upper Thailand from July 29 to Aug. 4, with heavy to very heavy rainfall and flooding in several areas.

China’s imports rose at a robust 7.2% rate in July, reversing June’s decline and marking the strongest performance in three months.

However, analysts say China’s factories will likely face stiff pressure in the months ahead, as the country’s exports grew at their slowest pace in three months, missing expectations and adding to concerns about its vast manufacturing sector.

The yen slumped on Wednesday after an influential Bank of Japan official played down the chances of a near-term rate hike in a fresh twist to the week, which started with massive moves driven by US recession fears and unwinding of popular carry trades.

The yen was down more than 2.35% at 147.80 per dollar having touched lows of 147.935.

A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. The front-month rubber contract on Singapore Exchange’s SICOM platform for September delivery last traded at 168.5 US cents per kg, up 0.7%.