TOKYO: Japanese rubber futures hit a one-week high on Monday, driven by hopes that surging oil prices would encourage a shift to natural rubber from the synthetic variety, while firmer Tokyo stock market also lent support.

The Osaka Exchange rubber contract for July delivery finished 5.4 yen, or 2.3%, higher at 244.8 yen ($2.1) per kg, reaching the highest since Jan. 21.

The benchmark booked a 2.9% gain for the month, reversing a small decline in December.

Oil rose more than 1% on Monday to the near 7-year highs hit in the previous session, while supply concerns and political tension in Eastern Europe and the Middle East put prices on track for their biggest monthly gain in almost a year.

Synthetic rubber is derived from crude oil and higher oil market, thus serves as a driver for natural rubber prices as well. Natural rubber market also benefits from stronger oil prices as that could lead to a shift from synthetic rubber.

Japan’s stock benchmark Nikkei average rose more than 1% on Monday.

The rubber market shrugged off weak data from top buyer China. Data out on Sunday showed China’s factory activity slowed in January as a resurgence of COVID-19 cases and tough lockdowns hit production and demand.

Mainland Chinese markets will be shut for a week-long Lunar New Year holiday from Jan. 31.

Singapore’s financial markets will be closed from Monday afternoon, Jan. 31 to Wednesday Feb. 2 inclusive for national holidays. Trading will resume on Thursday, Feb 3.