Rubber Rises to 3-Month High on Weaker Yen, China Manufacturing

Rubber climbed to a three-month high, extending gains from the biggest monthly advance since December, as a weaker yen and stronger-than-expected Chinese manufacturing data increased the appeal of the commodity.

Rubber for delivery in February on the Tokyo Commodity Exchange advanced 3.5 percent to settle at 278.5 yen a kilogram ($2,821 a metric ton), the highest settlement for a most-active contract since May 22. Futures gained 12 percent and entered a bull market in August, paring this year’s loss to 7.9 percent.

The yen fell against most of its major peers as speculators added to bearish bets as Prime Minister Shinzo Abe got backing for a sales tax increase from a consultative panel that urged stimulus to cushion the economic blow. China’s economy showed signs of strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August.

“China’s PMI brings a positive impact on a risky asset and we expect that Chinese rubber demand will start to increase,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo.

An official Purchasing Managers’ Index jumped more than estimated to 51.0, a government report showed yesterday in Beijing. A separate PMI released today by HSBC Holdings Plc and Markit Economics advanced to 50.1 last month from 47.7 in July, the largest gain since 2010. Readings above 50 signal expansion.

Futures for January delivery surged 5.3 percent to 21,055 yuan ($3,442) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board rose 0.3 percent to 84.90 baht ($2.65) a kilogram today, according to the Rubber Research Institute of Thailand.

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