Rubber Jumps to 8-Month High as Yen Drops, U.S. Car Sales Climb

Rubber surged to an eight-month high on the first trading day of 2013, extending last year’s 15 percent rally, as a weaker yen and increased U.S. auto sales boosted the appeal of the commodity.

Rubber for delivery in June advanced 1.8 percent to end at 307.8 yen a kilogram ($3,503 a metric ton), the highest settlement level since May 2 on the Tokyo Commodity Exchange. Futures gained for a fifth week.

The Japanese currency weakened, poised for the longest run of weekly losses since 1989 against the dollar, raising the appeal of yen-based contracts and helping exporters such as Toyota Motor Corp. expand overseas sales. U.S. deliveries of cars and light trucks climbed 13 percent to 14.5 million, the best annual total in half a decade, Autodata Corp. said, stoking speculation demand will increase.

“A weaker yen and optimism about demand created a bullish mood in the rubber market,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone.

General Motors Co. and Ford Motor Co., the two largest automakers by U.S. sales, both issued 2013 forecasts yesterday calling for the industry to exceed 15 million deliveries. Light-vehicle sales will be 15.1 million units, the average estimate of 18 analysts surveyed by Bloomberg showed.

Toyota and Honda Motor Co. notched the biggest gains among top carmakers in the U.S. last year, recapturing much of the market share they gave up after Japan’s tsunami in 2011. The yen dropped to 87.78 per dollar amid speculation the U.S. Federal Reserve will cut cash infusions later this year, and the Bank of Japan will add stimulus under the policy of Prime Minister Shinzo Abe to end deflation.

Rubber for delivery in May dropped 0.6 percent to close at 26,350 yuan ($4,229) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board advanced for a seventh day, rising 1.2 percent to 102.10 baht ($3.35) a kilogram today, according to the Rubber Research Institute of Thailand.

Before it's here, it's on the Bloomberg Terminal.