Rubber gained by the most in a week after data showed Japan’s consumer prices declined for a sixth time in seven months, sending the yen to a 2-1/2 year low against the dollar and raising the appeal of yen-based contracts.
The contract for delivery in June gained 1.4 percent to end at 311.6 yen a kilogram ($3,432 a metric ton) on the Tokyo Commodity Exchange. Futures fell 1.5 percent this week, snapping a seven-week rally.
Consumer prices, excluding fresh food, fell 0.2 percent in December from a year earlier, the statistics bureau said in Tokyo today. The Bank of Japan may face increasing pressure to add more stimulus as it remains distant from Prime Minister Shinzo Abe’s goal of ending deflation and its target of 2 percent inflation. The yen slumped to 90.69 per dollar, the weakest level since June 2010.
“The data raised speculation the BOJ will take additional measures for the 2 percent inflation target, leading to a further decline in the yen,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone today. “The yen’s downtrend will keep providing support to futures in Tokyo.”
Rubber for May delivery fell 0.3 percent to close at 25,565 yuan ($4,109) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board added 0.3 percent to 97.80 baht ($3.27) a kilogram, according to the Rubber Research Institute of Thailand.