Commodities Climb to Three-Month High After Japan’s Policy Shift

Commodities rose to a three-month high after the Bank of Japan said it will introduce open-ended asset purchases from 2014, boosting speculation that a revival of the economy will raise demand for natural resources.

The Standard & Poor’s GSCI Index of 24 raw materials rose as much as 0.6 percent to 664.62 today, the most since Oct. 19. Natural gas jumped 2.1 percent and soybeans gained 1.2 percent. Bank of Japan Governor Masaaki Shirakawa and six of nine board members voted for a 2 percent inflation target, a pace not sustained in Japan since the early 1990s, which is aimed at reviving the economy.

“Japan going for more growth, and preparing to see higher inflation as a result of it, is another way of trying to generate more activity in the economy,” Ole Hansen, head of commodity strategy at Saxo Bank A/S said by phone from Copenhagen. “Better economic sentiment is doing the trick here” and boosting commodity prices, he said.

U.S. natural gas gained as much as 2.2 percent to 3.645 per million British thermal units, in electronic trading on the New York Mercantile exchange versus Jan. 18. That’s the most since Dec. 7. The contract rose for the third day on forecasts for colder weather, Hansen said.

Temperatures in the northern half of the U.S. will be much lower than normal next month, Todd Crawford, chief meteorologist at Weather Services International, said in a statement yesterday. East Coast heating oil supplies fell a fifth consecutive week through Jan. 11 and are 42 percent below a year earlier, according to data from the U.S. Energy Information Administration.

Freezing Temperatures

Gasoil for February delivery rose as much as 0.9 percent to $971.75 a metric ton, the highest intraday level since Oct. 30, on the ICE Futures Europe exchange in London. The contract advanced amid freezing temperatures in London, Frankfurt, Paris and Amsterdam.

Copper reached a one-week high in London after the BOJ made its strongest commitment yet to ending economic stagnation in the world’s fourth-biggest consumer of the metal. Copper for delivery in three months climbed as high as 1 percent to $8,133.25 a ton on the London Metal Exchange, the highest since Jan. 11.