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Rubber Gains to Near Seven-Month High on Japan Stimulus Optimism

Rubber climbed for a fourth day as speculation that the Bank of Japan will add monetary stimulus pushed the country’s stocks benchmark to a 10-month high.

Rubber for delivery in May gained as much as 1 percent to 288.5 yen a kilogram ($3,422 a metric ton) on the Tokyo Commodity Exchange, nearing a seven-month high for the most- active contract of 289 yen reached yesterday. Futures were at 287 yen at 11:38 a.m. local time, extending this year’s advance to 9 percent.

The Nikkei 225 Stock Average rose above 10,000 for the first time since April as Japan’s central bank begins a two-day policy meeting. Toyota Motor Corp. (7203) surged as much as 2.4 percent after the Nikkei newspaper reported that the largest Asian automaker plans to expand global production to a record next year, raising the outlook for tire demand.

“A bull-run in Japanese stocks fueled a rally in rubber futures,” Hideshi Matsunaga, an analyst at broker ACE Koeki Co. in Tokyo, said by phone today.

Incoming Prime Minister Shinzo Abe met BOJ Governor Masaaki Shirakawa yesterday and requested he agree to an accord containing the 2 percent inflation target. That’s double the BOJ’s current goal. Abe’s party swept to victory in elections for the lower house of parliament on Dec. 16. Japan’s currency dropped after data showed the nation’s trade deficit swelled, boosting the appeal of yen-based contracts.

The contract for delivery in May was little changed at 25,275 yuan ($4,056) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board rose 0.6 percent to 96.15 baht ($3.14) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

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

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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