Benchmark Tokyo rubber futures rose on Monday as investors looked for bargains after prices hit two-month lows last week and as upbeat economic data from China, the world's biggest rubber buyer, helped improve market sentiment.
China's manufacturing activity grew at the fastest pace since 2012 in September as factories cranked up output to take advantage of strong demand and high prices, easing worries of a slowdown before a key political meeting next month.
The Tokyo Commodity Exchange (TOCOM) rubber contract for March delivery finished 0.6 yen, or 0.3 percent, higher at 202.4 yen ($1.79) per kg. It touched the lowest since Aug. 2 last week.
"Investors unwound positions as the market has fallen sharply in recent weeks following a slide in Shanghai futures," said Toshitaka Tazawa, analyst at Fujitomi Co.
"But I expect the TOCOM to remain in a narrow-ranged trade this week as Shanghai investors are away, with the 200 yen mark being a support for the near term," he said.
Chinese markets are closed this week due to a week-long National Day holiday which started on Sunday.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchangerose 1.8 percent from the previous Friday, the exchange said on Friday.
The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 146.1 U.S. cents per kg, down 0.8 cents.
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