TOKYO: Key TOCOM rubber futures ended 2 percent higher on Wednesday helped by the yen's fall and higher oil prices, with investors awaiting word of when the Thai government will intervene in the market.
The key Tokyo Commodity Exchange rubber contract for July delivery settled up 6.4 yen per kg at 323.5 yen. The contract rose as high as 325 yen, up 2.5 percent or 7.9 yen.
"With steady oil prices and concerns about short supply firmly supporting the downside, a steep fall in the market is unlikely," said Hiroyuki Kikukawa, general manager at trading house Nihon Unicom.
"The benchmark contract will easily jump to 350 yen if it breaks resistance at 327.30 yen," he said.
The Thai government last month approved a 15 billion baht plan to buy rubber from farmers at 120 baht per kg, and a senior Thai Agriculture Ministry official said the scheme would start in mid-February.
Rubber supply in Thailand and Malaysia, the biggest and the third-biggest producers respectively, is falling due to the wintering-dry season that cuts latex supply. The dry season normally lasts for a few months and ends by mid-April.
The yen hit a fresh 3-1/2 month high against the dollar, while the Nikkei average rallied to a six-month closing high after the Bank of Japan expanded its asset buying programme Tuesday.
Brent crude held above $118 as supply concerns in the Middle East sparked by tensions over Iran and disruptions in South Sudan trumped a worrisome outlook for Greece, which could face a messy bankruptcy.
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