By Emily Ou Yong
Japanese rubber futures edged up on Monday, on a rebound in oil prices and a near 40-year low in the yen, though gains were capped by improving natural rubber supply.
The Osaka Exchange (OSE) rubber contract for December delivery TOCOM:TRB1!, TOCOM:TRB1! was up 2.3 yen, or 0.56%, at 412.3 yen ($2.55) per kg as of 0215 GMT.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery SHFE:RU1! fell 145 yuan, or 0.87%, to 16,470 yuan ($2,420.96) per metric ton.
The most active September butadiene rubber contract on the SHFE (SHBRv1) fell 235 yuan, or 1.95%, to 11,790 yuan per metric ton.
The Japanese yen FX_IDC:USDJPY last traded at 161.75, continuing to languish near a 40-year low.
A weaker currency makes yen-denominated assets more affordable to overseas buyers.
Oil prices rose on Monday following days of tit-for-tat strikes by the United States and Iran in the Middle East, underscoring the fragility of their interim peace deal and further slowing energy shipping in the Strait of Hormuz.
Natural rubber often tracks oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
However, gains were capped by ample supply.
Major Southeast Asian producing regions, including Thailand, Indonesia, and Vietnam, have ramped up production following the wintering season, Japan Exchange Group said in a report on Monday.
The front-month rubber contract on Singapore Exchange's SICOM platform for July delivery SGX:TF1! last traded flat at 208.6 U.S. cents per kg.
($1 = 161.7500 yen)
($1 = 6.8031 yuan)