TOCOM rises on short-covering after Shanghai gains

Benchmark Tokyo rubber futures ended higher on short-covering in late trade, rebounding from earlier losses, helped by stronger Shanghai futures and a lower yen against the dollar, dealers said.

The Tokyo Commodity Exchange (TOCOM) rubber contract for October delivery finished 3.4 yen, or 1.5 percent, higher at 223.9 yen ($1.87) per kg, after falling to as low as 219.1 yen.

"The market was buoyed by short-covering towards the end of trade," said Jiong Gu, an analyst at Yutaka Shoji Co.

The most-active rubber contract on the Shanghai futures exchange for September delivery rose 175 yuan to finish at 14,485 yuan ($2,334.75) per tonne.

The dollar clawed its way higher to around 119.67 yen on Monday on another surprisingly bad round of U.S. economic data.

U.S. industrial production unexpectedly fell for a fifth straight month in April due in part to a further decline in oil and gas drilling, suggesting that the economy is growing at only a modest pace in the second quarter.

TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have risen about 17 percent from April's low to hit a 13-month high last week, but investors and traders are divided on the market's direction.

"In terms of fundamentals, there are more reasons to sell than buy, such as slower demand in China and an end of wintering season in producer countries," Gu said.

The front-month rubber contract on Singapore's SICOM exchange for June delivery last traded at 152.8 U.S. cents per kg, down 0.2 cent.