Rubber in Tokyo rebounded from a three-week low as Japan’s currency slid to the weakest level in five years against the dollar, boosting the appeal of yen-denominated contracts.
Futures for delivery in June on the Tokyo Commodity Exchange rose as much as 1.5 percent to 276.5 yen a kilogram ($2,639 a metric ton) and was at 274.6 yen at 10:35 a.m local time. The most-active contract settled at 272.3 yen yesterday, the lowest since Nov. 29. Prices fell 9.2 percent this year.
The yen weakened to 104.84 per dollar, the lowest since October 2008, amid bets the Bank of Japan will continue unprecedented easing while the U.S. Federal Reserve begins to pare stimulus. Governor Haruhiko Kuroda said today the Japanese central bank is committed to pursuing quantitative and qualitative easing and achieving a price-stability target of 2 percent at the earliest possible time.
“A declining yen gave most support to rubber futures,” said Hideshi Matsunaga, an analyst at Evolution Japan Co., a broker in Tokyo. “A recovery in the Shanghai market also raised speculation demand is improving in China.”
Rubber for May delivery on the Shanghai Futures Exchange was little changed at 18,415 yuan($3,033) a ton, recovering from a four-month low of 18,155 yuan reached yesterday.
Thai rubber free-on-board was unchanged at 83.45 baht ($2.55) a kilogram yesterday, according to the Rubber Research Institute of Thailand. A global surplus may climb to 366,000 tons next year from an estimated 336,000 tons this year, according to The Rubber Economist, a London-based industry adviser.
Source: Bloomberg
