Rubber Climbs From Three-Week Low as Yen’s Drop Boosts Appeal

By Aya Takada

June 8 (Bloomberg) -- Rubber rebounded from a three-week low as a drop in the Japanese currency against the dollar raised the appeal of yen-denominated contracts and investors’ concerns about the European fiscal crisis eased.

Futures in Tokyo climbed as much as 1.7 percent after slumping 6.1 percent yesterday, the most since May 7. The yen weakened against all of its most-traded counterparts as Asian equities ended two days of losses.

The dollar gained and Asian stocks advanced after Federal Reserve Chairman Ben S. Bernanke said that the U.S. recovery is moving at a “moderate” pace and he sees consumers in the world’s largest economy “coming back.” The euro rose, after reaching a four-year low against the dollar yesterday, amid speculation it has fallen too rapidly.

“Rubber recovered as selling spurred by European debt concern subsided,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today by phone. “Buying was not active as concern about economic recovery remains,” Shigemoto said.

Rubber for November delivery, the most-active contract, added 0.5 percent to 258.7 yen per kilogram ($2,822 a metric ton) on the Tokyo Commodity Exchange at 12:14 p.m. local time. Earlier, the price fell to 255.8 yen, the lowest since May 18.

Yen Declines

The yen fell to 91.68 per dollar at 12:18 p.m. Tokyo time from 91.37 in New York. The U.S. economic recovery is “moderate-paced” and started late last summer, Bernanke said yesterday, boosting investor confidence after concern over Europe’s debt crisis drove benchmark U.S. stock indexes to seven-month lows. Most Asian stocks rose, helping the MSCI Asia Pacific Index gain 0.4 percent.

In Thailand, the world’s largest exporter, the free-on- board price of RSS-3 grade rubber for July delivery fell 2.1 percent to 117.1 baht a kilogram, the Rubber Institute of Thailand said yesterday on its website. The group, which reviews prices once a day, will issue new data in the afternoon. The price rose to a record 130.55 baht on April 27.

Thailand may increase a levy on natural-rubber exports to promote processing and stabilize local prices, according to a deputy minister.

The revised levy may range from 0.9 baht ($0.03) to 5 baht a kilogram based on a sliding scale of free-on-board prices, Supachai Phosu, deputy minister of agriculture and cooperatives, said in an interview yesterday. The existing levy ranges from 0.9 baht a kilo to 1.4 baht. Should the cabinet approve the revised rates they will start on Oct. 1, Supachai said by phone.

September-delivery rubber on the Shanghai Futures Exchange added 5 yuan to 20,630 yuan ($3,020) a ton at 11:20 a.m. local time.

(bloomberg.com)