Japanese rubber futures spiked on Wednesday after two straight sessions of losses, supported by tightening supply from top producer Thailand as heavy rainfall and warnings of flash floods hamper tapping.
The Osaka Exchange (OSE) rubber contract for October delivery closed 11.4 yen, or 2.77% higher, at 422.9 yen ($2.68) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 500 yuan, or 2.81%, to 18,325 yuan ($2,698.34) per metric ton.
The most-active June butadiene rubber contract on the SHFE climbed 335 yuan, or 2.15%, to 15,925 yuan per ton.
Top producer Thailand is set to see heavy rainfall over the next week, according to the country’s meteorological agency.
The agency also cautioned on flash floods and overflows from May 16-18 in the south, where Thailand’s rubber plantations are concentrated.
The yen was largely steady at 157.7 per dollar, after a sudden move stronger on Tuesday had stoked speculation of a “rate check” by authorities, which is often a precursor to currency intervention.
The dollar was near its strongest level in a week. A weaker Japanese currency makes yen-denominated assets more affordable to buyers holding other currencies.
Oil prices fell on Wednesday as investors awaited developments around the fragile ceasefire in the Iran war and U.S. President Donald Trump headed to China for a high stakes summit with President Xi Jinping.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 230.1 U.S. cents per kg, up 3.7% as of 0700 GMT.