TOKYO: Key TOCOM rubber futures rose 3 percent on Wednesday after hitting a three-month low in the previous session, boosted by a more upbeat outlook for the global economy and restocking by China, but buyers remained cautious.
Strong earnings from US companies such as Coca-Cola, Spain's better-than-expected bill auction and an unexpectedly strong reading of German investor confidence all helped boost market confidence.
But prices are still down nearly 5 percent so far this month due to worries about Europe's debt crisis and slowing demand growth in China.
"We are still in a bear market and will remain so for a while," said Toshitaka Tazawa, analyst at trading house Fujitomi Co.
The key Tokyo Commodity Exchange rubber contract for September delivery settled up 9.2 yen, or 3 percent, at 311.9 yen per kg. The benchmark contract rose as high as 312.3 yen.
The most active Shanghai rubber contract for September delivery rose 775 yuan, or 2.9 percent, to close at 27,205 yuan per tonne.
The front-month May rubber contract on the SICOM in Singapore was last traded at 366 US cents per kg, up 3.6 cents.
Ample supply and recent declines in Tokyo futures have attracted buyers from Asia, and especially China which is replenishing its domestic inventory, dealers said on Wednesday.
Japan's Nikkei index rallied 2.1 percent on Wednesday while the dollar rose as high as 81.284 yen, pulling further away from Monday's trough of 80.29.
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