Benchmark Tokyo rubber futures rose to a three-week high on Tuesday after weak quarterly economic data in China reinforced market hopes for new stimulus measures, boosting Shanghai stocks and the U.S. dollar against the safe-haven yen.
The Tokyo Commodity Exchange (TOCOM) rubber contract for June delivery finished 2.7 yen, or 1.7 percent, higher at 160.1 yen ($1.36) per kg. It earlier touched a high of 160.5 yen, the highest since Dec. 28, 2015.
"Investors unwound short positions after seeing a spike in Shanghai stocks and rubber futures while the yen's drop also lent support," said Toshitaka Tazawa, an analyst with Fujitomi Co.
China's economic growth in the fourth quarter slowed to the weakest since the financial crisis, adding pressure on a government that is struggling to restore the confidence of investors after perceived policy missteps jolted global markets.
China stocks rebounded roughly 3 percent on Tuesday on expectations the government will unveil more stimulus moves.
The yen sagged 0.4 percent against the dollar to 117.77 yen , having recovered from a five-month low of 116.51 set on Friday, as China's fourth-quarter economic growth matched expectations.
A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
"Still, there are lingering worries about softening demand in China, which may cap further gains in rubber prices," Tazawa said.
The most-active rubber contract on the Shanghai futures exchange for May delivery finished 350 yuan higher at 10,345 yuan ($1,572.67) per tonne, after climbing to as high as 10,400 yuan, the highest in about two weeks.
The front-month rubber contract on Singapore's SICOM exchange for February delivery last traded at 108.8 U.S. cents per kg, up 1.2 cent.
