Rubber advanced the most in two months on optimism that economic stimulus in the U.S. would improve demand and as Thailand mulled extending export cuts.
The contract for delivery in August rose 3.2 percent, the biggest gain at close since Jan. 18, to 282 yen a kilogram ($2,944 a metric ton) on the Tokyo Commodity Exchange, paring this year’s loss to 6.8 percent.
The Japanese currency remained weak, boosting the appeal of yen-denominated contracts, after Nikkei reported that the new Bank of Japan Governor Haruhiko Kuroda would announce a policy shift at his first press conference. Asian stocks rose as the Federal Reserve said it would continue buying bonds to stimulate the U.S. economy, and data showed China manufacturing expanded.
“The rubber market is bolstered by positive sentiment from Fed stimulus measures, the weakening yen and better-than-expected data in China,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co. “Speculation that top producers will extend price-support measures by another year also gives a boost.”
Thailand, the biggest producer, will propose extending a reduction in shipments from top suppliers for a further year, said Deputy Farm Minister Yuttapong Charasathien.
The preliminary reading of a Purchasing Managers’ Index in China was 51.7 in March, according to HSBC Holdings Plc and Markit Economics. That compares with the 50.4 final reading for February and the 50.8 median estimate in a Bloomberg News survey of 11 analysts. A reading above 50 indicates expansion.
The contract for September delivery on the Shanghai Futures Exchange gained 0.4 percent to close at 22,900 yuan ($3,686) a ton. Thai rubber free-on-board rose 1.2 percent to 86.60 baht ($2.97) a kilogram today, the Rubber Research Institute of Thailand said on its website.