Rubber gained for a second day, climbing to the highest level in more than a week, after the Japanese currency fell to its lowest level in almost four years, boosting the appeal for the yen-based commodity used in tires.
The contract for delivery in September rose as much as 3.7 percent to 280.3 yen a kilogram ($2,822 a metric ton) on the Tokyo Commodity Exchange, the highest level since March 28, before trading at 277.9 yen at 10:58 a.m. local time. Futures jumped 6.6 percent yesterday, the biggest advance since November 2011. The rally has pared this year’s loss to 8.1 percent.
The yen traded at 99.35 to a dollar after touching 99.66, the weakest since May 2009. The currency has plunged after the Bank of Japan said last week it would double bond buying to reach its target of 2 percent annual inflation within two years.
“Weak yen has pushed up rubber prices,” said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co.
The yen has fallen 15 percent this year, limiting the downside for rubber which plunged into a bear market on April 1, when the most-active contract lost more than 20 percent from this year’s highest settlement of 334 yen.
Investors are also waiting for new measures from top producers to bolster prices, Gu said.
Thailand, Indonesia and Malaysia, which represent 70 percent of global output, will meet April 10-12 in Phuket to discuss measures, including extending an export reduction, Thailand’s Deputy Farm Minister Yuttapong Charasathien said April 1. The three nations agreed to cut exports by 300,000 tons in the six months through March after futures slumped to a three-year low of 205.6 yen in August 2012.
The contract for delivery in September gained 0.3 percent to 21,795 yuan ($3,514) a ton on the Shanghai Futures Exchange.
Thai rubber free-on-board fell 1.2 percent to 81.75 baht ($2.81) a kilogram on April 5, according to the Rubber Research Institute of Thailand. That was the lowest level since November 2009, data compiled by Bloomberg showed. Markets in Thailand were closed yesterday for a public holiday.
Source: Bloomberg
