The benchmark rubber contract on the Tokyo Commodity Exchange for July delivery dropped 0.3 yen to settle at 315.6 yen per kg.

"The yen was quite volatile and that encouraged investors to sell contracts and stay away from the market for a while. They wanted to see a clear direction on how the yen move before taking any position on TOCOM," said a Bangkok-based dealer.

Expectations that new Japanese Prime Minister Shinzo Abe would push the Bank of Japan into more aggressive monetary easing to beat deflation have made selling the yen a one-way bet in the past few weeks.

A weaker yen against the dollar in theory inflates yen-denominated TOCOM prices as rubber is traded in dollar in producing countries.

The yen edged 0.1 percent higher to 90.97 per dollar, hovering near two-and-a-half year low level on Wednesday.

Dealers said TOCOM prices were expected to move in a narrow range of 315-320 yen and could be largely dominated by the yen.

The most-active rubber contract on Shanghai futures exchange for May delivery was up 130 yuan to settle at 26,285 yuan per tonne.

The front-month rubber contract on Singapore's SICOM exchange for February delivery was last traded at 309.0 U..S. cents per kg, up 0.5 cent.

Copyright Reuters, 2013