Sept. 3 (Bloomberg) -- Rubber extended a rally for a second day, reaching the highest level in more than three months, as a depreciating yen increased the appeal of contracts denominated in the Japanese currency.
Rubber for delivery in February on the Tokyo Commodity Exchange advanced 2.1 percent to 284.3 yen a kilogram ($2,856 a metric ton), the highest settlement for a most-active contract since May 22. The advance pared losses to 6 percent this year.
The yen slid to 99.70 per dollar, the weakest level in a month, as signs of a global economic recovery sapped investor demand for the currency as a haven. Manufacturing data from China has strengthened the case for a recovery in the world’s second-largest economy and biggest user of rubber.
“Futures are being bought as concerns over the global economy are receding and Chinese data boosted the outlook for demand,” said Kazuhiko Saito, an analyst at broker Fujitomi Co.
The contract for January delivery on the Shanghai Futures Exchange fell 0.2 percent to 21,015 yuan ($3,433) a ton after yesterday surging 5.3 percent. Thai rubber free-on-board rose 1.2 percent to 85.90 baht ($2.68) a kilogram today, said the Rubber Research Institute of Thailand.
Thailand, the largest producer, will stop collecting fees on rubber exports until Dec. 31 to help boost local prices, according to Office of the Rubber Replanting Aid Fund.
The move will encourage exporters to buy more rubber from farmers, said Prasit Meadsen, the office’s acting director. Thai exporters pay 2 baht a kilogram on rubber shipments.
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