Rubber Set for Best Weekly Gain in One Year as Yen Breaches 100

Rubber jumped to a two-month high, heading for the best weekly rally since January 2012, asJapan’s currency breached 100 per dollar for the first time in four years, boosting the appeal of the yen-denominated futures.

Rubber for delivery in October advanced as much as 4.1 percent to 288.1 yen a kilogram ($2,858 a metric ton) on the Tokyo Commodity Exchange, the highest level since March 13. Futures have climbed almost 13 percent this week, the biggest rally since the week through Jan. 20, 2012. Losses for the most-active contract this year were pared to 5.7 percent.

TOCOM Rubber Futures Prices on Friday, May 10, 2013 (yen/kilogram)

 The yen weakened to 100.95 per dollar, the lowest level since April 2009. The currency came under pressure after data showed U.S. jobless claims fell to the lowest level since before the last recession, boosting investor confidence in the recovery of the world’s largest economy.

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“The yen’s breach of 100 per dollar raised speculation that the currency will extend losses further, boosting investor appetite for futures in Tokyo,” Takaki Shigemoto, analyst at research company JSC Corp., said today by phone.

Applications for unemployment insurance payments decreased by 4,000 to 323,000 in the week ended May 4, the fewest since January 2008, Labor Department figures showed. The four-week average fell to 336,750, the lowest since November 2007, the month before the start of the worst economic slump since the Great Depression.

Thai rubber free-on-board rose 0.2 percent to 89.30 baht ($3.02) a kilogram yesterday, the highest level since March 12, according to the Rubber Research Institute of Thailand. It was a 13 percent rebound from this year’s low of 79 baht reached on April 19. The nation, the biggest rubber producer, extended curbs on exports by 60 days to the end of May to boost prices, Deputy Farm Minister Yuttapong Charasathien said April 1.

Rubber for delivery in September on the Shanghai Futures Exchange added 0.1 percent to 20,355 yuan ($3,320) a ton. China’s passenger-vehicle sales rose 13 percent in April, data from the state-backed China Association of Automobile Manufacturers showed yesterday.

SHFE Rubber Futures Prices on Friday, May 10, 2013 (Yuan (RMB)/ton)

Source: Bloomberg