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Wednesday, January 19, 2022

Rubber Increases for Second Day as Weaker Yen Boosts Appeal

Rubber climbed for a second day as Japan’s currency weakened against the dollar, raising the appeal of yen-denominated futures, and as a rally in oil stoked speculation prices of synthetic products will increase.

The contract for delivery in November gained as much as 2.6 percent to 241.3 yen a kilogram ($2,547 a metric ton) on the Tokyo Commodity Exchange. Futures traded at 239.2 yen at 10:43 a.m., paring this year’s drop to 21 percent.

The yen fell to 94.78 a dollar after rallying the most since July 2009 last week. The Federal Open Market Committee meets this week. Fed Chairman Ben S. Bernanke said May 22 U.S. policy makers could curb stimulus should the job market improve.

“The weaker yen gave support to rubber futures,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said by phone today. “A rally in oil also spurred investors to buy back futures as tensions in the Middle East increased.”

West Texas Intermediate crude advanced 1.9 percent last week after President Barack Obamawas said to authorize arming Syrian rebels groups, ratcheting up tensions in a region home to about a third of the world’s oil supply.

Thai rubber free-on-board dropped 0.9 percent to 85.75 baht ($2.81) a kilogram on June 14, the lowest level since May 2, according to the Rubber Research Institute of Thailand.

Thailand, the world’s largest producer and exporter, plans to set up a fund to trade rubber on the Agricultural Futures Exchange of Thailand, or AFET, to help reduce price volatility, according to the nation’s farm ministry.

Rubber for delivery in September on the Shanghai Futures Exchange added 1.8 percent to 18,290 yuan ($2,982) a ton.

Source: Bloomberg

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