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May 21 (Bloomberg) — Rubber advanced as a decline in Japan’s currency against the dollar raised the appeal of yen- based contracts and the cash price in Thailand, the largest producer, advanced on low supply.
Futures in Tokyo climbed for the third time in four days. Earlier, the price had lost as much as 3 percent as Asian stocks tumbled on concern that the U.S. economic recovery may falter and Europe’s government debt crisis may worsen.
Japan’s currency fell as the euro advanced on optimism that European Union officials meeting today will take further action to halt the region’s market turmoil. In Thailand, prices on the physical market rose on limited supply and strong local demand, the Rubber Research Institute of Thailand said on its website.
“Tight supply from Thailand gave a support to the price of futures,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone.
Rubber for October delivery, the most-active contract, gained 1.1 percent to settle at 266.7 yen per kilogram ($2,964 a metric ton) on the Tokyo Commodity Exchange.
Thai RSS-3 grade rubber for June delivery gained 0.4 percent today to 118.35 baht ($3.65) a kilogram, excluding freight and insurance, the institute said.
The yen traded at 89.96 per dollar at 5:13 p.m. in Tokyo. Yesterday it advanced to the highest level since May 6.
The euro gained for a third day against the dollar before European Union President Herman Van Rompuy hosts a meeting of finance ministers in Brussels to discuss reforms to economic governance.
‘Stave Off’
“European officials are likely to discuss more steps to stave off the crisis,” said Yoh Nihei, a Tokyo-based trading group manager at Tokai Tokyo Securities Co.
Rubber futures gained 1.7 percent this week, the best performance since the week ended April 16, as political turmoil in Thailand raised concern that supply from the world’s largest exporter may be disrupted.
Thailand’s military ended a mission to disperse anti- government protesters from their central Bangkok base after a May 19 assault left 15 people dead and sparked arson attacks on shopping malls and banks.
“As rubber production and shipment operations are mainly done in the nation’s southern area, violence in Bangkok and other cities may not have had a major impact on the physical trade,” Sugata said.
Rubber futures reached a 21-month high of 338.5 yen on April 16 because of a seasonal drop in Thai production and optimism that global economic recovery will increase demand for the commodity used in tires.
September-delivery rubber on the Shanghai Futures Exchange Declined 0.6 percent to 21,640 yuan ($3,170) a ton.
Source: Bloomberg