Rubber Advances After China’s Manufacturing Expands, Yen Weakens

Rubber climbed, heading for a second weekly advance, after data showed China’s manufacturing expanded for the first time in three months in October, boosting the outlook for demand in the world’s biggest consumer.

Rubber for April delivery gained 1.5 percent to end at 259 yen a kilogram ($3,237 a metric ton) on the Tokyo Commodity Exchange. The most-active contract has gained 0.5 percent this week after rising 0.9 percent the week before.

A Purchasing Managers’ Index rose to 50.2 in October from 49.8 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today. That matched the median forecast in a Bloomberg survey of 30 economists. A reading above 50 indicates expansion. A final reading of a separate purchasing managers’ index from HSBC Holdings Plc and Markit Economics was 49.5 last month from 47.9 in September.

“The data eased concerns about China’s economic slowdown, leading to buybacks of futures,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said by phone.

The reports may bolster speculation China’s economy will pick up this quarter after industrial production, exports and retail sales accelerated in September. The data may also reduce pressure on outgoing Premier Wen Jiabao to roll out more stimulus measures during a once-a-decade power handover that begins with a Communist Party congress next week.

Futures also gained as the Japanese currency weakened against the dollar, raising the appeal of yen-based contracts, Shigemoto said. Japan’s central bank may ease monetary policy further to support the economy after expanding its asset-purchase program by 11 trillion yen this week, he said.

Persistent rains in southern Thailand have disrupted tapping, raising concerns that supply may drop, said Sureerat Kunthongjun, an analyst at AGROW Enterprise Ltd.

Rubber for January delivery gained 0.2 percent to 24,830 yuan ($3,980) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board rose 0.5 percent to 93.45 baht ($3.04) a kilogram today, Rubber Research Institute of Thailand data show.

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