BANGKOK: Tokyo rubber futures jumped 2 percent to a 3-month high on Wednesday on the back of intervention by the Thai government, but the upside was still capped as investors were cautious at a time of lingering fears over EU debt, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange for June delivery jumped 6.5 yen to settle at 320.7 yen ($4.13) per kg.
It rose as much as 2.2 percent to an intra-day high of 321.1 yen per kg, the highest since Oct. 18.
The nearby January contract expired on Wednesday. It rose 6.0 yen higher to finish at 302.0 yen per kg.
"Speculative buying pushed TOCOM prices higher today, but prices still lacked support to rise further as oil prices were quite steady, while a negative factor of EU debt was still there," a Bangkok-based dealer said.
Although demand outlook was likely to be better, Brent crude held above $110 on Wednesday, getting support from concern over Iran's renewed threat to close the vital Strait of Hormuz.
The International Monetary Fund said Europe's debt problems could tip the world economy into recession and a bigger firewall was urgently needed to keep the damage from spreading.
Rubber prices were expected to rise further in the coming weeks due mostly to Thai government intervention and seasonal falling supply, dealers said.
Thailand, the world's biggest rubber producer and exporter, is due to be in the wintering-dry season by late January, when rubber trees shed their leaves and produce less latex.
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