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Rubber gained, climbing for the first week in three, as the yen weakened against the dollar and signs that economic recovery will be sustained boosted the appeal of the commodity used to make tires.
Futures in Tokyo advanced as much as 1.8 percent, gaining for the first time in three days, as a drop in the dollar against the euro renewed investor interest in commodities as alternative assets.
The yen fell to a five-week low against the euro before reports that economists said will show German producer prices rose and U.S. consumer confidence improved, sapping demand for safer assets. Asian stocks advanced as a weak yen boosted the outlook for Japan’s exporters.
“Rubber futures draw support from the currency and equity markets,” said Takaki Shigemoto, an analyst at JSC Corp. in Tokyo. “A pessimistic view about the economy is fading as Japan took action to support a recovery.”
February-delivery rubber gained as much as 5.2 yen to 298 yen per kilogram ($3,473 a metric ton) before settling at 296.5 yen on the Tokyo Commodity Exchange.
“Easing worries over economic situation helped improve appetite for the commodity,” Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co., said by phone.
Yen Weakens
The yen weakened to 85.91 per dollar against 85.78 in New York yesterday. Japan sold the currency this week after it climbed to 82.88, the strongest since May 1995, threatening the nation’s export-led economic recovery. Prime Minister Naoto Kan said yesterday his government won’t tolerate “rapid movements” in the yen and is ready to take “decisive measures.”
German producer prices gained 0.3 percent in August from July, when they climbed 0.5 percent, according to a Bloomberg News survey before the report today.
The Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment advanced to 70 in September from 68.9 in August, another Bloomberg survey showed before today’s data.
Gains in rubber futures were limited as the nearest-dated contract in Tokyo extended losses amid speculation that physical deliveries may increase when the contract expires.
September-delivery rubber on the Tokyo Commodity Exchange, which will expire on Sept. 24, slumped as much as 1.2 percent to settle at 286 yen, extending losses for a third day.
Investors sold the contract amid speculation that as much as 2,570 tons of rubber may be delivered when it expires, Shigemoto said. The volume could more than double from 1,080 tons of physical delivery at the spot contract’s expiry last month, according to Norikazu Takei, a Tocom spokesman.
March-delivery rubber on the Shanghai Futures Exchange surged 3.2 percent to close at 25,985 yuan ($3,863) a ton, the highest close since Sept. 8.
Source: Bloomberg