Rubber Pares Gain as Yen Climbs Before Fed Meeting, Oil Rises

Rubber pared gains as oil advanced and Japan’s currency climbed against the dollar on prospects the U.S. Federal Reserve will signal the fate of monetary stimulus.

The contract for delivery in November on the Tokyo Commodity Exchange added 0.3 percent to settle at 237.3 yen a kilogram ($2,498 a metric ton) after jumping as much as 2.1 percent. Futures have declined 22 percent this year.

Fed Chairman Ben S. Bernanke will speak to reporters at the end of a two-day policy meeting today. He signaled May 22 that the central bank’s asset buying program aimed at bolstering the world’s largest economy could be scaled back. Oil in New York traded near a nine-month high after an industry report showed U.S. stockpiles dropped last week. Higher oil prices boost the cost of making synthetic rubber.

“The focus is on remarks from Bernanke after the policy meeting ends today,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone today. “The yen could rebound on risk aversion if his comments spur sales of stocks.”

Higher exports on a weaker yen helps boost the outlook of raw-material demand from Japanese manufacturers, Saito said. Japan’s exports surged by the most since 2010 in May as the yen depreciated, the Finance Ministry said today. The yen traded at 95.03 per dollar.

Rubber in Tokyo is still poised for a fifth monthly drop as global supply is set to exceed demand for a third year. The contract for September delivery on the Shanghai Futures Exchange added 0.6 percent to close at 18,300 yuan ($2,987) a ton.

Thai rubber free-on-board gained 1.2 percent to 86.50 baht a kilogram ($2.81) today, according to the Rubber Research Institute of Thailand.

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