Benchmark Tokyo rubber futures extended declines to end at a one-week low on Thursday, in line with the global commodities slump and weaker Asian shares.
The dollar advanced for a fifth straight session on Thursday, pressuring commodities after yet another Federal Reserve official talked up the chance of more than one increase in US interest rates this year.
The market, however, got some support from the Indonesian announcement that its government agencies and state-owned companies will buy 500,000 tonnes of domestically produced rubber to help support prices.
"That is equivalent to a one-month production of Thailand, and it will have an impact on the market," said a source with a Tokyo-based dealer.
The Indonesian government also said to provide subsidised loans to farmers to replant 1 million hectares of rubber plantation between 2016 and 2019.
The Tokyo Commodity Exchange rubber contract for August delivery <0#2JRU:> finished 2.4 yen lower at 175.1 yen per kg, the lowest settlement since March 16.
The US dollar was quoted around 112.92 yen, as compared with around 112.38 yen on Wednesday afternoon.
The most-active rubber contract on the Shanghai futures exchange for September delivery fell 255 yuan to finish at 11,505 yuan (US$1,767) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for April delivery last traded at 128.5 US cents per kg, down 3.3 US cents.
