TOKYO: Key TOCOM rubber futures ended higher on Wednesday, tracking rises in oil and the Shanghai market as the prospect of decreasing supply from some producing nations after January supported the downside.
The key Tokyo Commodity Exchange rubber contract for May delivery settled up 7.1 yen or 2.5 percent at 291.6 yen per kg after touching the day's high of 291.9 yen.
The most active Shanghai rubber contract for May delivery also closed up 2.5 percent, at 26,730 yuan per tonne. Volume stood at 904,120 lots.
"The price range has been gradually moving higher helped by the prospect of a supply shortage, but resistance will be solid around the 300 yen mark," said Naoki Asami, a chief broker at trading house Kanetsu.
He expects the benchmark contract to move within a range of 270 yen to 300 yen for a while.
The market faces a seasonal decline in supply from some rubber producing nations after January, while tapping has been delayed in Thailand due to unseasonable rain, Asami said.
Buyers in China, the world's biggest consumer, typically restock ahead of the Chinese New Year, which starts Jan. 22 this year, in anticipation of strong demand after the holiday season.
Indian rubber futures are likely to trade lower this week as domestic supplies rise in the peak production season while demand is subdued, analysts said.
US crude oil futures added to gains slightly in post-settlement trading on Tuesday after data from the American Petroleum Institute showed a 5 million barrel crude stocks draw last week, much more than forecast.
The Nikkei average hit a four-week high on Wednesday as investors warmed to the view that European policy-makers will come up with convincing steps this week to help resolve the region's debt crisis.
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