RUBBER futures in Tokyo extended gains from the biggest monthly advance since December as a weaker Japanese currency and stronger-than-expected Chinese manufacturing data increased demand for the yen-denominated commodity used in tires.
Rubber for delivery in February on the Tokyo Commodity Exchange (TOCOM) rose as much as 2.2% to 274.9 yen a kg (US$2,790 a metric tonne), before trading at 273.5 yen at 12:10 pm local time. Futures gained 12% and entered a bull market in August, paring this year’s loss to 9.4%.
The yen weakened against most of its major peers as speculators added to bearish bets as Prime Minister Shinzo Abe got backing for a sales tax increase from a consultative panel that urged stimulus to cushion the economic blow. China’s economy is strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August.
“China’s PMI brings a positive impact on a risky asset and we expect that Chinese rubber demand will start to increase,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo.
Futures for January delivery rose 2.9% to 20,585 yuan (US$3,364) a tonne on the Shanghai Futures Exchange. Thai rubber FOB was unchanged at 84.65 baht (US$2.64) a kg on 30 August, according to the Rubber Research Institute of Thailand. (Source: Bloomberg)