Benchmark Tokyo rubber futures extended gains into a third day on Wednesday to hit a 1-week high, backed by firmer Japanese equities and a brightening economic outlook for China, the world's biggest rubber buyer.
Japan's Nikkei index rose to two-year highs, cheered by an upbeat outlook for the global economy, though gains were trimmed by the close as the yen bounced against the dollar.
China's manufacturing activity grew at the fastest pace since 2012 in September, data showed on Saturday, as factories cranked up output to take advantage of strong demand and high prices, easing worries of a slowdown before a key political meeting this month.
The Tokyo Commodity Exchange (TOCOM) rubber contract for March delivery finished 2.7 yen, or 1.3 percent, higher at 208.5 yen ($1.85) per kg. It touched the highest since Sept. 28 of 209.7 yen earlier in the session.
"The TOCOM is testing to see if there is more upside after bouncing back around the key 200-yen mark early this week," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
"But with Chinese investors away this week and key U.S. job data due on Friday, investors will likely remain cautious for the rest of the week," he said, adding possible North Korea provocation on Oct. 10, the date the North celebrates the founding of the North Korean communist party.
Chinese markets are shut for a week-long holiday that started on Sunday.
The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 150.5 U.S. cents per kg, up 1.5 cent.
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