Rubber rallied above the 300-yen level for the first time since May as Japan’s currency held near the lowest in more than two years on prospects for additional stimulus driven by Prime Minister Shinzo Abe’s new government.
Rubber for delivery in June rose as much as 2.4 percent to 303.1 yen a kilogram ($3,471 a metric ton) on the Tokyo Commodity Exchange, the highest level for the most-active contract since May 8. Futures traded at 301 yen at 11:34 a.m. local time, and have gained 14 percent this year.
The yen slid to the lowest level against the dollar since September 2010 yesterday on expectations that the new government will push for more cash infusions to bolster the economy. A weaker Japanese currency makes yen-denominated contracts cheaper for holders of other currencies.
The “weakening yen pushed up Tokyo rubber prices,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co., said by phone. Rubber also advanced on concerns that supplies from key exporters will decline after Indonesia, the second-largest grower, forecast lower production next year, he said.
Output in Indonesia may drop 8.9 percent to 2.77 million tons next year as the country limits production and shipments in coordination with other growers, Agriculture Minister Suswono said yesterday. That would be the first fall since 2009.
Rubber for May delivery rose as much as 3.2 percent to 26,135 yuan ($4,190) a ton on the Shanghai Futures Exchange, the highest price since May 11, before trading at 25,880 yuan. China is the world’s largest natural-rubber user.
Thai rubber free-on-board advanced 0.5 percent to 97.1 baht ($3.17) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The country is the largest exporter.
Source: Bloomberg
