By Aya Takada
May 29 (Bloomberg) -- Rubber reached a two-week high and headed for a fifth straight monthly gain as a rally in oil boosted the cost of making rival synthetic products and Japan’s industrial output data raised speculation demand may improve.
Futures in Tokyo gained as much as 0.9 percent to 168.5 yen, the highest since May 14. Crude oil reached a six-month high yesterday as a government report showed U.S. inventories dropped. Japan’s factory production rose the most in at least six years in April as companies replenished inventories amid evidence the global recession is easing.
“Data showing the economy may have bottomed raises the possibility that demand for the raw material will recover,” Hisaaki Tasaka, an analyst at Tokyo-based commodity broker ACE Koeki Co., said today in a phone interview.
Natural rubber for November delivery added 0.7 percent to 168.2 yen a kilogram ($1,744 a metric ton) on the Tokyo Commodity Exchange at 11:27 a.m. local time.
Japan’s factory output climbed 5.2 percent in April from March, when it gained 1.6 percent, the Trade Ministry said today in Tokyo. The increase was faster than the 3.3 percent expected by economists. Companies said they planned to increase output in May and June as well, the report showed.
Toyota Motor Corp., the world’s largest carmaker, will increase production 38 percent in Japan as inventories fall, President Katsuaki Watanabe told reporters in Tokyo yesterday.
The carmaker will raise daily production to 11,000 vehicles a day in June and July from an average of 8,000 vehicles in the three months ended March, Watanabe said. Toyota is increasing domestic production after cutting it for nine straight months through April to reduce dealers’ inventories.
Gains in rubber futures were limited as the Japanese currency increased against the dollar, cutting the appeal of yen-denominated contracts. The yen rebounded from a two-week low against the dollar as the increase in industrial production fueled speculation funds will flow into Japanese assets.
The Shanghai Futures Exchange was closed for a holiday.
To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net
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