Japanese rubber futures inched higher on Monday, supported by firmer oil prices and hopes that Europe would announce policy support for local automakers, although gains were limited by a stronger yen.
The Osaka Exchange (OSE) rubber contract for May delivery 
TRB1!, TRB1! was up 1.4 yen, or 0.43%, at 326.8 yen($2.11) per kg, as of 0205 GMT.
The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery RSS31! rose 45 yuan, or 0.3%, to 15,115 yuan ($2,138.54) per metric ton.
The most-active January butadiene rubber contract on the SHFE (SHBRv1) gained 35 yuan, or 0.34%, to 10,480 yuan per ton.
The European Commission could announce a package to support the local automotive sector, including a possible watered down version of its 2035 combustion engine phase-out, on December 16, Reuters reported, citing an industry source.
This comes as car makers have struggled with lower-than-expected demand for battery electric vehicles and fierce competition from China.
Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
The yen 
USDJPY found footing at 155.28 per dollar after sliding through November.
A stronger Japanese currency makes yen-denominated assets less affordable to overseas buyers.
Oil prices hovered at two-week highs as investors expect a U.S. Federal Reserve interest rate cut this week that will lift economic growth and energy demand.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Weaker rubber demand from Europe, the impact of U.S. tariffs, and high inventory levels in China have pressured prices in recent sessions, Japan Exchange Group said in a report.
The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery TF1! last traded at 171.7 U.S. cents per kg, up 0.1%.
AloJapan.com