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Thursday, September 28, 2023

Rubber Advances to One-Week High as Yen’s Decline Raises Appeal

Rubber climbed to the highest level in more than a week as Japan’s currency declined against the dollar, raising the appeal of yen-denominated contracts.

Rubber for delivery in December on the Tokyo Commodity Exchange gained as much as 1.3 percent to 247.9 yen a kilogram ($2,484 a metric ton), the highest level since July 5. The most-active contract traded at 246.1 yen at 11:12 a.m., paring losses for this year to 19 percent.

The yen declined to 99.87 per dollar amid speculation Group of 20 finance ministers and central bankers meeting this week will endorse the Bank of Japan’s monetary easing. Russian Deputy Finance Minister Sergei Storchak said the G-20 probably won’t call for a tapering of stimulus in nations including Japan.

“Futures drew support from the currency market,” said Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo. “The yen may decline further depending on the result of the G-20 meeting.”

The BOJ doubled monthly bond purchases to more than 7 trillion yen in April, after Prime Minister Shinzo Abe urged the central bank to take steps to overcome deflation. Opinion polls have shown Abe’s Liberal Democratic Party and coalition partners are likely to win a majority in the upper house election this weekend, ending a hung parliament.

Rubber for January delivery on the Shanghai Futures Exchange lost 0.1 percent to 18,235 yuan($2,970) a ton. Thai rubber free-on-board remained unchanged at 78.85 baht ($2.54) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: Bloomberg

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