SINGAPORE: Japanese rubber futures rose on Monday as unfavourable weather conditions in rubber producing regions and a weaker yen supported, although lower oil prices capped gains.

The Osaka Exchange (OSE) rubber contract for September delivery closed up 0.3 yen, or 0.09%, at 325.5 yen ($2.14) per kg, after rising to 335.9 yen earlier in the session. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 260 yuan to finish at 14,850 yuan ($2,052.83) per metric ton.

Japan’s benchmark Nikkei average closed 0.91% higher. The Japanese yen weakened 0.11% to 151.80 against the dollar amid increased short positions on yen. A weaker currency makes yen-denominated assets more affordable to overseas buyers.

Oil prices slid more than 1% as Middle East tensions eased after Israel withdrew more soldiers from southern Gaza and committed to fresh talks on a potential ceasefire in the six-month conflict.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Japan’s service-sector sentiment fell in March as rising living costs and bad weather weighed on consumption, a government survey showed. The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 165.8 US cents per kg, up 1.97%.