Rubber climbed to a two-week high as Japan’s currency neared 100 per dollar, its weakest level since 2009, bolstering demand for the yen-based futures.
Futures for delivery in September rose 0.4 percent to settle at 276.9 yen a kilogram ($2,779 a metric ton) on the Tokyo Commodity Exchange, the highest close for the most-active contract since March 27. That trimmed this year’s losses to 8.5 percent. Earlier, rubber advanced to 280.8 yen.
The yen came under pressure amid speculation money will flow out of Japan in search of higher yields as the nation’s central bank eases monetary policy to spur inflation. The currency also declined as minutes of the Federal Reserve meeting in March showed several officials said the central bank should begin tapering its quantitative easing program later this year.
“The currency market gave the largest support to rubber futures,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone today.
Futures also advanced on expectations top producers may take additional measures to support prices, he said. Thailand, Indonesia and Malaysia, which represent 70 percent of global rubber output, are holding a three-day meeting through tomorrow.
Thai rubber free-on-board added 1.2 percent to 83.25 baht ($2.87) a kilogram today, according to the Rubber Research Institute of Thailand. The price rebounded after touching 81.75 baht on April 5, the lowest level since November 2009.
Global natural-rubber reserves are poised to advance to the highest level in 13 years as production exceeds consumption through next year, pressuring prices, according to London-based industry adviser The Rubber Economist.
On the Shanghai Futures Exchange, the contract for September delivery lost 1.7 percent to close at 21,460 yuan ($3,463) a ton.