By Emily Ou Yong
Japanese rubber futures rose for a third session on Tuesday, supported by a weaker yen and firmer oil prices, although persistent weakness in tyre sector demand limited gains.
The Osaka Exchange (OSE) rubber contract for December delivery TOCOM:TRB1!, TOCOM:TRB1! was up 1.3 yen, or 0.31%, at 421.2 yen ($2.60) per kg, as of 0222 GMT.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery SHFE:RU1! rose 70 yuan, or 0.41%, to 16,990 yuan ($2,502.87) per metric ton.
The most active September butadiene rubber contract on the SHFE (SHBRv1) rose 35 yuan, or 0.29%, to 12,240 yuan per metric ton.
The yen weakened anew on Tuesday as traders grew emboldened to push the currency lower with no sign yet of intervention by Japanese authorities, though the risk of a surprise yen-buying move by Tokyo kept losses in check.
The yen FX_IDC:USDJPY struggled on the weaker side of 162 per dollar in early Asia trade and languished near its lowest level against the British pound since 2007 at 217.09 FX:GBPJPY, having slid to a new low overnight.
A weaker yen makes Japanese rubber futures more affordable to buyers holding other currencies.
Oil prices edged higher on Tuesday, but gains were limited as traders looked beyond easing geopolitical tensions in the Middle East and turned their attention to supply increases and demand prospects.
Gains were, however, capped as downstream demand remained soft.
Chinese tyre manufacturers are contending with weak new order expectations and accumulating finished goods inventory, with the semi-steel tyre segment under particular strain, said Chinese broker Guoxin Futures in a note.
Some tyre companies have begun shutting down for maintenance since early July, reducing near-term rubber consumption, according to Guoxin Futures.
The front-month rubber contract on Singapore Exchange's SICOM platform for August delivery SGX:TF1! last traded at 216.2 U.S. cents per kg, up 1.1%.
($1 = 161.8600 yen)
($1 = 6.7882 Chinese yuan)