Rubber Nears Five-Month High as Weakening Yen Increases Appeal

By Aya Takada

April 16 (Bloomberg) -- Rubber advanced for a second day as a weaker Japanese currency boosted the appeal of yen-denominated contracts for the commodity traded globally in dollars.

Prices gained as much as 0.8 percent to 178.2 yen a kilogram in Tokyo, close to the five-month peak of 179.7 yen ($1,808 a metric ton) reached April 13. The yen declined from yesterday’s high of 98.15 per dollar on speculation gains in global equities will increase investor appetite for higher- yielding assets.

“The currency market gave the most support to rubber futures,” Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today by phone.

Rubber for September delivery, the most-active contract, added 0.4 percent to 177.5 yen a kilogram on the Tokyo Commodity Exchange at the 11:00 a.m. local break.

Gains in futures were limited as buyers in China, the world’s largest user, slowed raw material purchases on higher prices, Shigemoto said. Shippers in Thailand, the world’s biggest exporter, offered RSS-3 grade rubber for May shipment at $1.72 a kilogram today, up from $1.69 a week earlier, he said.

China’s gross domestic product grew at the slowest pace in almost 10 years, hit by collapsing exports, the statistics bureau said in Beijing today. GDP expanded 6.1 percent in the first quarter from a year earlier, after a 6.8 percent gain in the previous three months.

Rubber futures have gained 16 percent this month as China increased purchases to meet demand from tire makers. China’s natural rubber imports reached 190,000 tons in March, compared with 180,000 tons in the first two months of this year.

China’s passenger car sales increased 10 percent in March from a year ago to a record 772,400 as the government began giving out 5 billion yuan ($732 million) in subsidies to help rural residents buy vans and light trucks.

September-delivery rubber on the Shanghai Futures Exchange, the most-active contract, added 1.2 percent to 15,505 yuan a ton at 10:45 a.m. local time.

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To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net.