Rubber Recovers From One-Week Low as Weak Yen Boosts Appeal

Rubber rebounded from the lowest level in a week as Japan’s currency weakened below 101 per dollar, raising the appeal of yen-denominated futures.

Rubber for delivery in December gained 0.6 percent to end at 241.5 yen a kilogram ($2,388 a metric ton) on the Tokyo Commodity Exchange. Futures slid to 237 yen earlier, the lowest level for a most-active contract since July 1.

The yen declined to 101.3 per dollar, nearing a five-week low reached yesterday. The most-accurate foreign-exchange forecasters expect the currency to fall to 110 per dollar by year-end, a level not seen since 2008.

“Futures in Tokyo were supported by speculation that the Federal Reserve will curtail stimulus and boost the dollar further against the yen,” Takaki Shigemoto, an analyst at research company JSC Corp., said by phone today. Gains were limited by concerns that China’s economy is slowing.

China’s producer prices fell 2.7 percent in June, adding to signs of slowdown in the nation’s economy and raising concerns demand may weaken from the world’s largest user. The decline in factory-gate prices extended its longest streak in a decade amid slowing economic growth and lower commodity costs.

Rubber for January delivery on the Shanghai Futures Exchange dropped 0.7 percent to close at 17,180 yuan ($2,803) a ton. Natural-rubber inventories climbed 125 tons to 114,121 tons, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said July 5.

Thai rubber free-on-board declined 0.9 percent to 81.7 baht ($2.61) a kilogram today, according to the Rubber Research Institute of Thailand.

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