Rubber Futures Climb on Signs Recessions Easing in U.S., Japan

By Aya Takada

May 27 (Bloomberg) -- Rubber advanced for the second time this week after data signaled easing recessions in the U.S. and Japan, the world’s two largest economies, raising optimism demand will recover for the commodity used in tires.

Japan’s exports fell at a slower pace in April, data from the Finance Ministry showed today, adding to signs the country’s worst recession since World War II may be moderating. Confidence among U.S. consumers jumped in May by the most in six years, fueling speculation the economy will recover later this year.

“Market sentiment improved thanks to good economic data from the U.S. and Japan,” Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co., said today in a telephone interview.

Natural rubber for November delivery, the most-active contract, traded at 163.8 yen a kilogram ($1,721 a metric ton) on the Tokyo Commodity Exchange at 10:20 a.m. local time, up 0.9 percent from its settlement yesterday.

Japan’s shipments abroad slumped 39.1 percent in April from a year earlier, after dropping 45.5 percent in March, the Finance Ministry said today in Tokyo. From a month earlier, exports rose 1.9 percent, a second straight gain.

Overseas demand has shown signs of stabilizing since the first quarter, when an unprecedented drop in exports propelled the Japanese economy to its sharpest contraction since records started in 1955. Toyota Motor Corp. says the U.S. market may have bottomed, and Japanese manufacturers such as Komatsu Ltd. stand to benefit from renewed demand in China.

The Conference Board’s sentiment index surged to 54.9, higher than forecast, according to figures from the New York- based research group yesterday. U.S. stocks climbed for the first time in five days on speculation a lifting of the gloom surrounding the worst recession in half a century may spur consumers, who account for 70 percent of the economy, to spend.

Rubber futures increased after crude oil climbed to the highest settlement in more than six months in New York yesterday, boosting the cost of making rival synthetic products.

Futures also advanced after the Japanese currency dropped to a one-week low against the dollar, increasing the appeal of yen-denominated contracts, Saito said.

Rubber for September delivery on the Shanghai Futures Exchange, the most-active contract, lost 0.2 percent to 14,735 yuan ($2,155) a ton at 9:23 a.m. local time.

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