Rubber advanced as expectations grow that the Bank of Japan (8301) will increase monetary stimulus when it concludes a two-day meeting today, weakening the Japanese currency and raising the appeal of yen-based contracts.
Rubber for delivery in June gained as much as 0.9 percent to 314.5 yen a kilogram ($3,507 a metric ton) before trading at 313.5 yen on the Tokyo Commodity Exchange at 10:53 a.m. Futures have advanced 3.6 percent this year.
The BOJ will today adopt the 2 percent inflation target that Prime Minister Shinzo Abe has called for, according to 21 of 23 economists surveyed by Bloomberg News. Ending consumer- price declines would give companies and households more incentive to borrow, helping the world’s third-biggest economy to pull out of a contraction. The central bank is forecast to increase its asset purchases by 10 trillion yen, according to the poll.
“Expectations are growing for additional stimulus by the BOJ, which will weaken the yen further and boost rubber futures in Tokyo,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said by phone today.
Japan’s currency has tumbled 12 percent in the past three months, the biggest decline among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.
Rubber for delivery in May added 1.1 percent to 26,045 yuan ($4,186) a ton on the Shanghai Futures Exchange.
Thai rubber free-on-board was unchanged at 98.70 baht ($3.32) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The world’s largest producer has spent 17.4 billion baht in buying 182,446 tons of rubber from farmers above market rates, Thailand government spokesman Tossaporn Serirak said yesterday.
Source: Bloomberg
