Tokyo rubber up 1 pct to top 320 yen on Thailand

TOKYO, May 16 (Reuters) - Tokyo rubber futures jumped more than 1 percent to above 320 yen a kg for the first time since late February on Friday as investment funds bought strongly due to supply worries in Thailand, the world's top producer.

* A trader in Thailand's Hat Yai said the weather in producing areas has been improving in the last few days after heavy rains, but sellers were reluctant to lower prices.

*"Sellers were reluctant to sell at a low level as they were not sure about the supply conditions after the rain. Physical supplies appear to be tight at the moment," the trader said.

"Buyers are buying at only a small amount from the spot market. They want to wait until prices fall, hoping for the current situation to improve by June."

* The benchmark Tokyo Commodity Exchange rubber contract for October delivery <0#JRU:> finished the morning session at 320.0 yen a kg, up 3.3 yen or 1.04 percent from Thursday's close.

It hit a session high of 320.2 yen -- the highest for a benchmark since Feb. 26, when it reached a 20-month high of 324.3 yen.

* Investment funds have been buying Japanese rubber futures after seeing steep falls in Chinese rubber inventories. Data of rubber warehouse inventories on the Shanghai Futures Exchange is scheduled to be released after 0700 GMT.

In the previous survey last week, Shanghai stocks fell to 39,025 tonnes as of May 8, down 7,085 tonnes or 15 percent from 46,110 on April 29. [ID:nSHA229888]

* "Rubber is bullish backed by strong oil prices and uncertainty about Thai supplies," said Hiroyuki Kikukawa, an analyst at IDO Securities in Tokyo.