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Rubber advanced for the first time in four days as data showed China’s manufacturing quickened in September, increasing speculation demand for the commodity used in tires will expand.
The most-active contract climbed as much as 0.7 percent to 310.6 yen per kilogram ($3,717 a metric ton) before settling at 309.8 yen on the Tokyo Commodity Exchange. It approached a five- month high of 312.8 yen reached Sept. 27.
Manufacturing accelerated in China for a second straight month, adding to signs the fastest-growing major economy is stabilizing after policy makers curbed lending in an effort to avert asset bubbles. The nation is the biggest rubber user.
“The manufacturing data showed purchasing power remains strong in China,” said Sureerat Kunthongjun, an analyst at Bangkok-based AGROW Enterprise Ltd. “This will help boost demand for rubber.”
A China purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics rose to 52.9, the highest in five months, from 51.9 in August. The data are seasonally adjusted and readings above 50 indicate an expansion.
China’s car-sales growth accelerated for the first time in five months in August, according to the China Association of Automobile Manufacturers. Auto sales in China are set to outpace the U.S. for a second year, spurring carmakers including Toyota Motor Corp. to boost capacity or plan new models.
Still, the market upside is limited as the strengthening Japanese currency cools appetite for yen-denominated contracts, said Varut Rungkhum, an analyst at broker Agro Wealth Ltd.
The yen traded at 83.51 per dollar at 3:51 p.m. in Tokyo after climbing to 83.50, the highest level since Sept. 15, when it touched a 15-year peak of 82.88.
Sentiment Index
Japan’s Tankan index of sentiment rose the least since early 2009 in September and companies forecast that pessimists will outnumber optimists by year-end as a rising yen threatens the nation’s recovery.
The commodity market will be volatile as the Japanese government may act to weaken the currency, said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co.
“The BOJ is likely to do something such as injecting more capital,” said Junichi Makino, a senior economist at Daiwa Institute of Research Ltd. in Tokyo. “That won’t reverse the yen’s uptrend, but should stem excessive gains.”
Cash price in Thailand dropped 0.2 percent to 109.15 baht ($3.58) per kilogram as investors are concerned over strengthening yen and local currency, Rubber Research Institute of Thailand said on its website today.
Limited supply following persistent rainfalls in southern Thailand remains price supportive, it said.
China’s financial markets will be closed from Oct. 1 to Oct. 7 National Day holidays.
“Some investors may close their positions ahead of long Chinese holidays,” Varut said by phone from Bangkok.
The March-delivery contract on the Shanghai Futures Exchange climbed 0.8 percent to 26,910 yuan ($4,025) a ton.
Source: Bloomberg