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Aug. 24 (Bloomberg) — Rubber advanced by as much as 5.2 percent as a rally in global stocks raised optimism an economic recovery will boost demand for the commodity used in car tires.
Futures in Tokyo climbed to the highest since Aug. 17 after dropping 6.8 percent last week, the worst loss in 14 weeks. Asian stocks rose, led by commodities producers, after sales of existing homes in the U.S. surged the most on record.
“Investors increased risk appetite and bought the futures after positive economic data sent global stocks soaring,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd., said today by phone.
January-delivery rubber gained by as much as 10 yen to 204 yen a kilogram ($2,156 a metric ton) before trading at 201.7 yen on the Tokyo Commodity Exchange at 11:07 a.m. local time. The bourse suspended trading for five minutes after the 10-yen increase in prices triggered a circuit breaker system.
The Standard & Poor’s 500 Index climbed 1.9 percent on Aug. 21 to the highest close since Oct. 6. Purchases of existing U.S. homes jumped 7.2 percent in July, the most since the tallies began in 1999, the National Association of Realtors said. Federal Reserve Chairman Ben S. Bernanke said the global economy is “beginning to emerge” from recession.
Rubber futures also advanced as the Japanese currency weakened, raising the appeal of yen-denominated contracts for the commodity traded globally in dollars.
The yen declined on growing optimism the global economy is recovering from recession, easing demand for the currency as a refuge. The euro advanced before a report forecast to show European industrial orders declined at a slower pace in June.
The yen declined to 94.65 per dollar at 10:40 a.m. in Tokyo from 94.38 in New York on Aug. 21, when the Japanese currency reached the highest since July 22.
January-delivery rubber on the Shanghai Futures Exchange added 4 percent to 18,785 yuan ($2,750) a ton at 10:15 a.m. local time.
Rubber inventories increased 7,382 tons to 74,940 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said Aug. 21. The volume was the highest level since March 2008.
Source: Bloomberg