"Even the Japanese yen is steadier. It's not for sure it will not fall again. The currency issue is still the main factor in the market," said one trader in Singapore. "Apart from that, the market has not changed much fundamentally. Demand is still very weak," the trader said. The firmer yen, supported by joint US and Japanese intervention, was the key to better sentiment in the market late last week, traders said.

Traders in Thailand said some short-covering from Japanese buyers had helped limit price falls.

Buying interest was seen in September shipments but actual trade was thin as some buyers turned to Indonesia for cheaper offers, they said.

However, both buyers and sellers said theywere reluctant to commit in big amounts as they would rather wait for a clearer direction of the yen.

"The price eased after the yen firmed. We would wait for a clearer picture of the yen before making an offer," said a Hat Yai trader. Traders saw the Thai rubber market continuing its bearish trend in the near term on a lack of fundamental changes. "The situation in Japan and China looks scary. There has been no positive news on the fundamental front," said another Hat Yai trader.

Thai RSS3 rubber for September shipment was quoted around 69.00-70.00 US cents compared with 71.00 US cents last week while October was quoted 70.00-71.00 cents.

Despite some expectation that buyers might turn to Indonesia, traders there said prices were likely to remain weak because of the Indonesian rupiah's continuing volatility.

"Buyers came into the market after seeing the rupiah strengthening a bit. But market sentiment is likely to stay bearish because the currency is still volatile," said one Jakarta-basedtrader.

"There is not much happening in the market lately, except for the fact that buyers entered the market again after the rupiah gained. We don't see any improvement in market sentiment," he said.

Traders said tyre-grade SIR20 was sold (overnight) at 28.25 US cents/lb fob Medan for October shipment at the end of last week. October rubber was done at 27.75 fob Palembang and 27.50 fob Jambi.

August rubber finished the week at 27.75 fob Medan, 27.50 fob Palembang and Surabaya and 27.25 fob Pontianak and Jambi. Prices in Malaysia ended last week mostly higher but with little overseas interest as buyers stayed on the sidelines due to the uncertainty in the Malaysian ringgit's movement against the US dollar, traders said.