June 8 (Bloomberg) — Rubber rebounded from a three-week low as a drop in the Japanese currency against the dollar raised the appeal of yen-denominated contracts and investors’ concerns about the European fiscal crisis eased.

Futures in Tokyo climbed as much as 2.1 percent after slumping 6.1 percent yesterday, the most since May 7. The yen weakened against all of its most-traded counterparts as Asian equities ended two days of losses.

The dollar and oil rose after Federal Reserve Chairman Ben S. Bernanke said the U.S. recovery is moving at a “moderate” pace. The euro rose, after reaching a four-year low against the dollar yesterday, on speculation it has fallen too rapidly.

“Rubber recovered as selling spurred by European debt concern subsided,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today by phone. “Buying was not active as concern about economic recovery remains,” Shigemoto said.

Rubber for November delivery, the most-active contract, added 1.9 percent to settle at 262.1 yen per kilogram ($2,858 a metric ton) on the Tokyo Commodity Exchange. Earlier, the price fell to 255.8 yen, the lowest since May 18.

The yen fell to 91.93 per dollar in Tokyo from 91.37 in New York. The U.S. economic recovery is “moderate-paced” and started late last summer, Bernanke said yesterday, boosting investor confidence after concern over Europe’s debt crisis drove U.S. stock indexes to seven-month lows. Most Asian stocks rose, helping the MSCI Asia Pacific Index to gain 0.4 percent.

Crude for July delivery climbed as much as 74 cents to $72.18 a barrel on the New York Mercantile Exchange from $71.44 a barrel yesterday.

‘Oil’s Rebound’

“Crude oil’s rebound helped boost the rubber price after tumbling yesterday,” Chaiwat Muenmee, an analyst at broker DS Futures Co., said by phone from Bangkok. Costlier crude boosts the cost of making synthetic rubber.

In Thailand, the world’s largest exporter, prices extended decline for the fifth day on increased supply, the Rubber Institute of Thailand said on its website today. The free-on- board price of RSS-3 grade rubber for July delivery dropped 0.4 percent to 116.6 baht a kilogram today.

Thailand may increase a levy on natural-rubber exports to promote processing and stabilize local prices, Supachai Phosu, deputy minister of agriculture and cooperatives, said in an interview yesterday.

The revised levy may range from 0.9 baht ($0.03) to 5 baht a kilogram based on a sliding scale of free-on-board prices, Supachai said. The existing levy ranges from 0.9 baht to 1.4 baht. Should the cabinet approve the revised rates, they will start on Oct. 1, Supachai said.

September-delivery rubber on the Shanghai Futures Exchange gained 0.4 percent to settle at 20,710 yuan ($3,031) a ton.

Source: Bloomberg

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