Rubber advanced after data showed Japan’s consumer prices declined for the sixth time in seven months, sending the yen to a 2-1/2 year low against the dollar and raising the appeal of yen-based contracts.
The contract for delivery in June gained as much as 1.3 percent to 311.4 yen a kilogram ($3,444 a metric ton) and was at 309.3 yen on the Tokyo Commodity Exchange at 10:25 a.m. Rubber has fallen 2.2 percent this week, the first drop in eight weeks.
Japan’s consumer prices fell 0.2 percent in December from a year earlier, the statistics bureau said in Tokyo today. The Bank of Japan may face increasing pressure to add more stimulus as it remains distant from Prime Minister Shinzo Abe’s goal of ending deflation.
“The data raised speculation the BOJ will take additional measures for the 2 percent inflation target, leading to a further decline in the yen,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone today. “The yen’s downtrend will keep providing support to futures in Tokyo.”
The yen slumped to 90.69 per dollar, the lowest level since June 2010. The dollar also gained after data showed U.S. jobless claims unexpectedly fell and an index of leading economic indicators increased, signaling the world’s largest economy continues to expand.
Rubber for delivery in May added 0.3 percent to 25,710 yuan ($4,133) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board lost 1 percent to 97.55 baht ($3.27) a kilogram yesterday, according to the Rubber Research Institute of Thailand.
Source: Bloomberg
