Rubber gained for the first time in three days as Japan’s currency dropped to near a four-year low against the dollar, boosting the appeal of yen-based contracts.
Rubber for delivery in September climbed as much as 2.4 percent to 255.2 yen a kilogram ($2,570 a metric ton) and was at 253 yen on the Tokyo Commodity Exchange at 10:58 a.m. The contract for October delivery, listed on the bourse today, traded at 255 yen after opening at 253.7 yen.
The yen dropped to 99.76 per dollar in Tokyo, nearing a four-year low of 99.95 reached on April 11, amid prospects the Bank of Japan will renew its commitment to monetary stimulus at a meeting this week.
“A weak yen is the largest support to rubber futures,” said Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo. “Speculation is growing that the currency will weaken to 100 per dollar or below in the short term.”
The BOJ will hold a policy meeting on April 26 after unveiling a plan earlier this month to double its holdings of government bonds in the next two years. 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 1.1 percent to 18,660yuan ($3,020) a ton.
Thai rubber free-on-board gained 1 percent to 81.30 baht ($2.82) a kilogram yesterday, according to Rubber Research Institute of Thailand. The nation, the world’s largest producer, is working on plans to reduce supply and increase demand to stabilize prices, Amnuay Patise, head of a working group for the government, said April 22.
Source: Bloomberg
