This entry was posted on Wednesday, October 6th, 2010 at 7:45 pm and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
Rubber climbed to a five-month high, mirroring a rally in commodities, after the Bank of Japan eased its monetary policy, stoking speculation other central banks may follow suit.
The March-delivery contract gained as much as 2.1 percent to 324.1 yen per kilogram ($3,899 a metric ton), the highest level since April 26, before settling at 321.7 yen on the Tokyo Commodity Exchange.
Japan’s central bank yesterday cut its benchmark overnight interest rate for the first time since 2008 and pledged to hold it at “virtually zero” until officials foresee a sustained end to deflation. Gold reached a record and the Reuters/Jefferies CRB Index of materials rose 1.6 percent yesterday, the biggest gain since Sept. 1.
“Investor appetite for commodities is increasing as central banks in advanced nations are moving to loosen their monetary policy further to sustain economic recovery,” said Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co. “Rubber was bought in tandem with metals and oil.”
The renewed push for monetary policy easing comes as the International Monetary Fund warns growth in advanced economies is falling short of its forecasts ahead of its annual meetings in Washington this week.
Bank of England officials may consider further stimulus tomorrow, while the central banks of Australia, Canada and New Zealand are among those holding fire on interest-rate increases.
“The Bank of Japan is at the head of the pack,” said Stewart Robertson, an economist at Aviva Investors in London, which manages about $370 billion in assets. “It looks like a lot of others will follow.”
Rubber futures also increased as the physical market in Thailand, the largest producer and exporter, extended gains on tight supply, Tasaka at ACE Koeki said.
Auctioned price of ribbed smoked sheets in Thailand added 1.3 percent to 105.6 baht ($3.52), the Rubber Research Institute of Thailand said today on its website.
The Shanghai market is closed for National Day holidays.
Natural-rubber inventories monitored by the bourse expanded 4,680 tons to 31,580 tons, based on a survey of 10 warehouses, the exchange said Sept. 30.
Source: Bloomberg