Rubber increases as weaker yen, equities rally raise appeal

Rubber climbed for the first time in three days as a weaker Japanese currency raised the appeal of yen-based contracts and a rally in Asian stocks boosted investor confidence in an economic recovery. Futures in Tokyo gained as much as 2.1 per cent after slumping 5.6 per cent in the previous two days. The Japanese currency extended declines as political uncertainty in Japan and signs the US economy is gaining traction tilted demand toward higher-yielding assets. Rubber for November delivery, the most-active contract, rose as much as ¥5.7 to ¥274.9 per kilogram ($2,983 a metric tonne) before trading at ¥270.8 on the Tokyo Commodity Exchange at 12:59 pm local time. The yen weakened against all major peers and was at 92.19 versus the dollar, from 92.13 in New York yesterday, when it touched a two-week low. Output may exceed 200,000 tons a month in June and July, up as much as 30 per cent from a low-production period in April and May, the group’s President Luckchai Kittipol said. Output this year may be 3.2 million tonnes, matching that of 2009, he said. The MSCI Asia Pacific Index advanced 2.6 per cent to 113.65 as of 1:02 pm in Tokyo. An index of pending US home resales climbed 6 per cent in April, the National Association of Realtors said, exceeding the median forecast of economists surveyed by Bloomberg News. September-delivery rubber on the Shanghai Futures Exchange lost 5 yuan to 22,110 yuan ($3,237) a tonne as of the 11:30 am local-time break.