TOCOM ends up 1.2pc after hitting 3-week high

Benchmark Tokyo rubber futures ended 1.2 percent higher on Tuesday after hitting a three-week high as a recent jump in oil prices and fall in Japanese rubber inventories helped improve market sentiment.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have made some recovery though oversupply concerns led to an 8 percent drop last month.

The Tokyo Commodity Exchange rubber contract for July delivery finished 2.5 yen higher at 204.8 yen per kg. The benchmark contract hit an intraday high of 206.5, the highest since Jan. 13.

Crude rubber inventories at Japanese ports fell 0.5 percent from 10 days ago to 12,976 tonnes as of Jan. 20, marking the second straight week of declines, data from the Rubber Trade Association of Japan showed on Monday.

"Crude has been firm since late last week, and it's providing support," said a Tokyo-based broker.

But the gains were curbed in late afternoon as the U.S. dollar weakened to around 117.17 yen from around 117.64 yen a day earlier.

Oil opened firm in Asian trade on Tuesday after clocking gains of 11 percent in the prior two sessions, but prices began coming off their best on persistent worries over China's demand outlook.

The most-active rubber contract on the Shanghai futures exchange for May delivery rose 225 yuan to finish at 13,280 yuan per tonne.

The front-month rubber contract on Singapore's SICOM exchange for March delivery last traded at 138.60 U.S. cents per kg, down 1.2 cent.