Benchmark Tokyo rubber futures edged higher for a second session on Wednesday, helped by firmer Shanghai futures and lower yen against the U.S. dollar, but concerns over the rising inventories capped gains.
The Tokyo Commodity Exchange (TOCOM) rubber contract for September delivery ended higher by 2.1 yen, or 1.2%, at 182.3 yen (US$1.70) per kg.
The most-active rubber contract on the Shanghai futures exchange for September delivery rose 80 yuan to finish at 11,190 yuan (US$1,781) per tonne.
The dollar rose 0.3% to 107.295 yen on Wednesday after dipping to 106.885 the previous day, buoyed as improving risk appetite reduced demand for its Japanese peer, a currency often sought in times of market turmoil and political tensions.
A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
"Still, rubber market is under pressure as inventories in Shanghai and Tokyo are both rising," said Masayo Kondo, president of Commodity Intelligence, a Japanese commodity market research company.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.3% from last release on April 4, the exchange said last Friday.
Rubber inventories at TOCOM-approved warehouses increased to 13,018 tonnes, as of March 31, up 464 tonnes from March 20, and nearly nine-fold from a year earlier, according to TOCOM data.
The front-month rubber contract on Singapore's SICOM exchange for May delivery last traded at 137.2 US cents per kg, up 0.4 cent.
(US$1 = 107.3200 yen)
(US$1 = 6.2837 Chinese yuan)
Source: The Edge Markets