Rubber climbed for a third day to the highest level in more than a week after the Federal Reserve said it will maintain monthly bond purchases to stimulate growth, boosting demand outlook for the commodity used in tires.
The contract for February delivery on the Tokyo Commodity Exchange jumped as much as 3.3 percent to 287 yen a kilogram ($2,922 a metric ton), the highest level for a most-active contract since Sept. 9. Futures traded at 286.1 yen at 10:25 a.m., paring losses to 5.4 percent this year.
The Federal Open Market Committee said it wants to see more evidence that improvement in the U.S. economy will be sustained before adjusting the pace of its $85 billion in monthly purchases of Treasury and mortgage debt. The decision boosted oil in New York, raising the appeal of natural rubber as an alternative to synthetic products.
“Investor appetite for the commodity increased as the Fed maintained monetary stimulus,” said Hideshi Matsunaga, an analyst at broker ACE Koeki Co. in Tokyo.
Rubber was also supported by speculation that farmer protests in Thailand may disrupt shipments from the world’s largest producer and exporter, he said.
Farmers blocked a road in the southern Thai province of Nakhon Sri Thammarat after a clash on Sept. 16 in which 76 police officers were injured and eight cars burnt, Interior Minister Charupong Ruangsuwan said yesterday. Thai rubber free-on-board was unchanged at 82.70 baht ($2.66) a kilogram, the Rubber Research Institute of Thailand said yesterday.
The Shanghai Futures Exchange is closed today and tomorrow for holidays.
Source: Bloomberg
