Rubber Gains for First Day in Five as Weaker Yen Raises Appeal
Dec. 11 (Bloomberg) -- Rubber increased for the first time this week as a drop in Japan’s currency raised the appeal of yen-denominated contracts and gains in equity markets boosted speculation an economic recovery will raise raw material demand.
Futures in Tokyo gained as much as 1.3 percent, reversing yesterday’s 3.6 percent slump. The yen dropped as signs the global economy is improving spurred demand for higher-yielding assets. Asian stocks advanced as a drop in U.S. joblessness claims and the country’s narrower-than-estimated trade deficit boosted confidence that an economic expansion is gathering pace.
“Rubber futures drew support from the currency market,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today by phone. “A recovery in equities markets also increased the risk appetite of investors, leading to purchases of commodities.”
Rubber for May delivery, the most-active contract, gained as much as 3.2 yen to 247 yen per kilogram ($2,789 a metric ton) before trading at 246.5 yen on the Tokyo Commodity Exchange at 11:44 a.m. local time.
The Japanese currency dropped against all of its 16 major counterparts before reports today forecast to show U.S. retail sales advanced for a second month and confidence among American consumers rebounded.
The MSCI Asia Pacific Index rose 0.5 percent to 119.77 as of 11:46 a.m. in Tokyo. A Labor Department report showed yesterday the four-week average number of Americans filing for joblessness benefits declined to a one-year low.
Thai Output
Rubber futures have lost 6.1 percent this week, poised for the worst performance since August, as output increased in top producer Thailand after rain subsided.
“In producing areas in Thailand it did not rain this week as much as before,” Shigemoto said. “Production is picking up and supply will increase.”
Rubber futures climbed to a 14-month high of 264.7 yen on Dec. 7 amid speculation that heavy rain would slash Thai output, leading to a shortage in the global market as China, the largest consumer, leads a recovery in demand.
Flooding hit four provinces in southern Thailand in late November. The situation is back to normal, according to the Royal Irrigation Department.
Rubber plantations in the four Thai provinces affected by flooding account for about 20 percent of the country’s total plantation area of about 2.7 million hectares (6.7 million acres), according to the Rubber Research Institute of Thailand.
Rubber for March delivery on the Shanghai Futures Exchange added 0.6 percent to 21,630 yuan ($3,168) a ton at 10:52 a.m. local time.
Dec. 11 (Bloomberg) -- Rubber increased for the first time this week as a drop in Japan’s currency raised the appeal of yen-denominated contracts and gains in equity markets boosted speculation an economic recovery will raise raw material demand.
Futures in Tokyo gained as much as 1.3 percent, reversing yesterday’s 3.6 percent slump. The yen dropped as signs the global economy is improving spurred demand for higher-yielding assets. Asian stocks advanced as a drop in U.S. joblessness claims and the country’s narrower-than-estimated trade deficit boosted confidence that an economic expansion is gathering pace.
“Rubber futures drew support from the currency market,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today by phone. “A recovery in equities markets also increased the risk appetite of investors, leading to purchases of commodities.”
Rubber for May delivery, the most-active contract, gained as much as 3.2 yen to 247 yen per kilogram ($2,789 a metric ton) before trading at 246.5 yen on the Tokyo Commodity Exchange at 11:44 a.m. local time.
The Japanese currency dropped against all of its 16 major counterparts before reports today forecast to show U.S. retail sales advanced for a second month and confidence among American consumers rebounded.
The MSCI Asia Pacific Index rose 0.5 percent to 119.77 as of 11:46 a.m. in Tokyo. A Labor Department report showed yesterday the four-week average number of Americans filing for joblessness benefits declined to a one-year low.
Thai Output
Rubber futures have lost 6.1 percent this week, poised for the worst performance since August, as output increased in top producer Thailand after rain subsided.
“In producing areas in Thailand it did not rain this week as much as before,” Shigemoto said. “Production is picking up and supply will increase.”
Rubber futures climbed to a 14-month high of 264.7 yen on Dec. 7 amid speculation that heavy rain would slash Thai output, leading to a shortage in the global market as China, the largest consumer, leads a recovery in demand.
Flooding hit four provinces in southern Thailand in late November. The situation is back to normal, according to the Royal Irrigation Department.
Rubber plantations in the four Thai provinces affected by flooding account for about 20 percent of the country’s total plantation area of about 2.7 million hectares (6.7 million acres), according to the Rubber Research Institute of Thailand.
Rubber for March delivery on the Shanghai Futures Exchange added 0.6 percent to 21,630 yuan ($3,168) a ton at 10:52 a.m. local time.
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