Rubber Gains to Five-Week High as U.S. Jobs Data Spurs Demand

By Supunnabul Suwannakij and Aya Takada

Aug. 5 (Bloomberg) -- Rubber advanced to a five-week high as better-than-expected U.S. employment data spurred optimism in an economic recovery, boosting demand for the commodity.

Futures in Tokyo climbed as much as 3 percent to the highest level since June 28 after U.S. reports showed service industries and payrolls rose more than forecast in July. Prices also gained as Asian stocks rose toward a three-month high, boosting investor appetite for riskier assets.

“Improved employment data has a positive psychological impact on the market, spurring optimism the economy may grow, boosting demand for rubber,” Varut Rungkhum, an analyst at commodity broker Agro Wealth Ltd., said today by phone from Bangkok. Also, oil “above $82 a barrel provides support for the rubber market,” he said.

January-delivery rubber rose to 287 yen per kilogram ($3,333 a metric ton) before settling at 280.7 yen on the Tokyo Commodity Exchange.

January-delivery rubber on the Shanghai Futures Exchange declined 1.8 percent to 24,440 yuan ($3,609) a ton at 3:00 p.m. local time.

U.S. companies added 42,000 workers in July, compared with a revised 19,000 in June, according to figures yesterday from ADP Employer Services, in a private report based on payrolls. Economists surveyed by Bloomberg News had forecast a gain of 30,000, according to the median estimate.

Asian stocks rose toward a three-month high, led by Japanese equities, after Toyota Motor Corp. boosted its annual profit forecast. The MSCI Asia Pacific Index advanced 0.6 percent to 121.37 as of 4:32 p.m. in Tokyo.

Cash prices in Thailand advanced, tracking gains on the Tokyo market, the Rubber Research Institute of Thailand said on its website today. The price rose 0.3 percent to 104.75 baht ($3.26) per kilogram.

(bloomberg.com)