Rubber climbed for a second day to the highest level in more than a week as a rally in oil boosted the appeal of the commodity as an alternative to synthetic products used to make tires.
Rubber for delivery in October advanced as much as 2.5 percent to 263.1 yen a kilogram ($2,644 a metric ton), the highest level since April 16, before trading at 259.8 yen on the TokyoCommodity Exchange at 10:39 a.m. The rally pared this year’s loss for the most-active contract to 14 percent.
West Texas Intermediate crude traded near the highest level in almost two weeks after surging the most this year, as a government report showed that U.S. gasoline stockpiles tumbled. Stronger oil prices add to costs of making synthetic rubber.
“Rubber was bought back along with oil and metals amid expectations that monetary stimulus will support economic recovery,” Hideshi Matsunaga, an analyst at broker ACE Koeki Co. in Tokyo, said today by phone.
The Bank of Japan will hold a policy meeting tomorrow after unveiling a plan earlier this month to double its holdings of government bonds in the next two years to end deflation. It may upgrade its outlook on consumer-price gains excluding fresh food to at least 1.5 percent from 0.9 percent for fiscal 2014, according to people familiar with the central bank’s discussions.
Rubber for September delivery on the Shanghai Futures Exchange added 0.2 percent to 19,000yuan ($3,075) a ton. Thai rubber free-on-board gained for a third day, rising 0.6 percent to 81.80 baht ($2.83) a kilogram yesterday, according to Rubber Research Institute of Thailand.