Benchmark Tokyo rubber futures climbed for a third straight session on Tuesday, backed by the yen's decline, end-of-month trading and hopes the market may have bottomed, but the contract ended May with its biggest monthly fall in more than two years.
The Tokyo Commodity Exchange rubber contract for November delivery finished 2.5 yen, or 1.5 percent, higher at 165.5 yen ($1.49) per kg.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, dropped 15 percent in May, the biggest monthly decline since January 2014.
"A lower yen in late trade and position adjustments ahead of China's PMI, an OPEC meeting and U.S. job data due later this week were behind the rise," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
The U.S. dollar was set to post its best month in 1-1/2-years, having gained around 4.5 percent since the start of May after a number of intervention warnings from Japanese officials pushed down the Asian currency. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
Growth in China's vast manufacturing sector likely stalled in May after slight expansions in the previous two months, a Reuters poll showed, throwing more cold water on hopes that the world's second-largest economy is reviving. The official manufacturing PMI data will be released on June 1.
U.S. oil prices rose on Tuesday, buoyed by the start of the U.S. summer driving season and ahead of an OPEC meeting on Thursday.
Economists predict the U.S. jobs report, due on Friday, will show that employers added 170,000 jobs, slightly more than they did in April. Hourly wages are expected to show a 0.2 percent increase from the previous month.
"The rubber prices look to head toward 175-176 yen level in the near future before turning lower again," Kikukawa said.
"As little surprise is expected at an OPEC meeting this time, all eyes will be on China's economic data and U.S. monetary policy after the job data," he added.
The most-active rubber contract on the Shanghai futures exchange for September delivery fell 60 yuan to finish at 10,455 yuan ($1,587.82) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for June delivery last traded at 128.6 U.S. cents per kg, up 1.7 cent.
