Benchmark Tokyo rubber futures rose on Tuesday, bouncing back from the previous session's plunge, as firmer oil prices and a softer yen against the dollar lent support.
Oil prices extended gains on Tuesday after OPEC moved to cap Nigerian oil output and Saudi Arabia pledged to limit exports next month to help rein in global oversupply.
Against the yen, the dollar eased slightly to 111 yen on Tuesday, having slipped as low as 110.625 yen, its lowest since mid-June, the previous day, as investors positioned for a Federal Reserve meeting starting later in the day.
"Rubber prices got a boost from stronger oil prices and the yen's drop," said Hiroyuki Kikukawa, general manager of research, Nissan Securities.
The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery ended up 2.2 yen, or 1.1 percent, at 211.5 yen ($1.9) per kg. The TOCOM July contract expired on Tuesday.
"Since rubber prices began climbing sharply last summer, investors are reluctant to increase short positions, but there are no strong incentives to buy either," Kikukawa said.
Investors' focus will be on an economic policy by China, the world's biggest rubber consumer, ahead of and after this year's Communist Party Congress, he added.
The most-active rubber contract on the Shanghai futures exchange for September delivery fell 25 yuan to finish at 13,640 yuan ($2,020) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 152.5 U.S. cents per kg, up 0.4 cent.
($1 = 111.1200 yen)
