Tokyo Commodity Exchange (TOCOM) futures rose to an over 3-month high on Wednesday, as growing hopes for a US-China trade deal boosted investors' risk appetite.
TOCOM's rubber contract for April delivery finished 0.5 yen higher at 178.4 yen ($1.64) per kg, after touching the highest since July 30 of 180.3 yen earlier in the session.
The United States and China are working to narrow their differences enough to sign a "phase one" trade deal as early as this month.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 35 yuan to finish at 12,110 yuan ($1,731) per tonne. China's new technically specified rubber (TSR) 20 futures contract was last up 40 yuan at 10,165 yuan per tonne.
"Optimism over US-Sino trade talks lent support to Shanghai and Tokyo rubber prices," a Tokyo-based dealer said.
"But since the TOCOM has risen more than Shanghai lately, it is likely to come under pressure as investors want to take profits," the dealer said.
Top natural rubber producers Thailand, Indonesia and Malaysia forecast an 800,000-tonne drop in output this year, the International Tripartite Rubber Council (ITRC), representing the three countries, said on Wednesday.
The front-month rubber contract on Singapore's SICOM exchange for December delivery last traded at 135.4 US cents per kg on Wednesday, unchanged from the previous day.
Japan's benchmark Nikkei stock average inched up to a fresh 13-month high on Wednesday, as hopes for a US-China trade deal, a weaker yen and rising bond yields buoyed exporters and financials.
US dollar was quoted around 108.97 yen, compared with around 108.76 yen on Tuesday afternoon.
Oil prices fell on Wednesday, pulled down by a larger-than-expected build-up in US crude stockpiles, after gaining for three sessions on expectations of an easing in US-China trade tensions.
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