Rubber climbed to the highest close in more than a week, advancing for a third day, on speculation that China may take additional steps to boost its economy, while Thailand expands a government price-support program.
The December-delivery contract climbed 1 percent to 250.4 yen ($3,169 a metric ton) on the Tokyo Commodity Exchange, the highest settlement since July 6. There was no trade yesterday as the exchange was closed for a holiday in Japan.
Premier Wen Jiabao said while momentum for a recovery isn’t yet in place, the government will step up policy fine-tuning in the second half to support growth, Xinhua News Agency said July 15. Thailand, the world’s largest exporter, may double a budget for purchases, Deputy Farm Minister Nattawut Saikuar said today.
“The market was supported by expectations for China’s additional stimulus,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone. Speculation also grew that Federal Reserve Chairman Ben S. Bernanke may hint at further monetary easing in testimony today, he said.
Bernanke will present the outlook for the world’s largest economy in his semi-annual monetary-policy report to Congress today and tomorrow. The International Monetary Fund yesterday cut its 2013 global growth forecast on Europe’s debt crisis.
Thailand’s budget for purchases, aimed at supporting prices, may increase to 30 billion baht ($950 million) to buy as much as 200,000 tons from farmers, Nattawut said. The prices for state purchases from farmers will be increased, he said.
“The measures assure that the government is serious in shoring up rubber prices,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.
Rubber for September delivery dropped 1.4 percent to 24,270 yuan ($3,808) a ton on the Shanghai Futures Exchange.
Thai rubber free-on-board gained 0.6 percent to 99.2 baht a kilogram today, according to the Rubber Research Institute. The price touched 98.6 baht a kilogram yesterday, the cheapest since Jan. 5, 2010, data compiled by Bloomberg show.