Rubber climbed to near a one-month high as a weakening Japanese yen improved the appeal of the commodity used in tires and gloves, amid concern flooding in Thailand, the world’s largest producer, may lower supply.
The September-delivery contract gained as much as 1.5 percent to 464.8 yen a kilogram ($5,444 a metric ton) on the Tokyo Commodity Exchange before trading at 460 yen at 10:44 a.m. local time. The most-active contract touched 466.8 yen on April 5, the highest level since March 7.
“The main factor today is the weakening yen,” Roka Komiya, a rubber trader at Marubeni Corp., said by phone from Singapore. Demand for nearby contracts from Japanese and U.S. manufacturers rose after Thailand’s southern provinces were inundated, he said.
The yen tumbled against all of its major counterparts tracked by Bloomberg on speculation theBank of Japan will expand economic stimulus as the nation recovers from its worst earthquake on record, and on speculation the European Central Bank will increase borrowing costs.
The yen weakened to as low as 85.50 a dollar, compared with 85.27 at the close of stock tradingin Tokyo yesterday.
Thai supply falls seasonally as farmers reduce tree-tapping during the so-called wintering season from February to May.
Rainfall may continue to spread across southern provinces this week, the Thai Meteorological Department said on its website today. Fourteen provinces in the south represent about 80 percent of the country’s rubber output.
Flooding in 10 southern Thai provinces has killed 51 people and affected 2 million, the Department of Disaster Prevention & Mitigation said in a statement on its website. About 50,000 rai (19,641 acres) of rubber plantations have been damaged. Flooding has eased and the government is rebuilding infrastructure in three flooded provinces, it said.
The physical price of Thai rubber surged 3 percent to 180 baht ($5.96) a kilogram on April 5 amid damage to plantations from floods, lowering production, according to the Rubber Research Institute of Thailand.
Rubber for September delivery gained for a second day, rising as much as 0.9 percent to 36,245 yuan ($5,539) a ton on the Shanghai Futures Exchange.
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