Rubber Rebounds From One-Week Low as Weak Yen Increases Appeal
Rubber futures rallied from a one- week low as Japan’s currency traded at the weakest in almost three years, raising the appeal of yen-denominated contracts.
The contract for delivery in July gained 0.4 percent to end at 331.6 yen a kilogram ($3,525 a metric ton) on the Tokyo Commodity Exchange. Futures recovered after dropping to 323.4 yen in after-hours trading on Feb. 8, the lowest level since Feb. 4. The most-active contract has gained 9.6 percent this year.
The yen climbed to 94.22 per dollar after Haruhiko Kuroda, a potential contender for the Bank of Japan governor, said yesterday monetary stimulus by the central bank could be justified for 2013. U.S. Treasury Undersecretary Lael Brainard said she supports efforts in Japan to end deflation and reinvigorate growth.
“A weakening yen helps Japan’s auto industry boost sales overseas, which is positive for rubber demand,” Takaki Shigemoto, an analyst at JSC Corp. in Tokyo, said by phone today.
Gains were limited after data showed rubber stockpiles in China increased, raising speculation demand from the world’s largest consumer may be slowing, Shigemoto said.
The Shanghai Futures Exchange is closed this week for holidays. Natural-rubber inventories rose 1,201 tons to 100,015 tons, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said Feb. 8.
Japan’s new vehicle tire sales fell 10 percent on year to 3.69 million units in January, Japan Automobile Tyre Manufacturers Association said today. That compared with an on- year decline of 18 percent last month, it said.
Thai rubber free-on-board added 0.5 percent to 97.85 baht ($3.27) a kilogram today, according to the country’s Rubber Research Institute.
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