Bloomberg News

Rubber Slumps to Four-Month Low on Strong Yen, Demand Concerns

April 03, 2013

Rubber dropped the most in two weeks as the Japanese currency strengthened to near a one-month high, cutting the appetite for yen-based commodities.

The contract for delivery in September slumped as much as 3.5 percent to 252.5 yen a kilogram ($2,716 a metric ton), the lowest since Nov. 19 for a most-active contract on the Tokyo Commodity Exchange, and was at 252.8 yen at 11:12 a.m. Futures have fallen 16 percent this year and passed the threshold into a bear market on April 1.

The yen advanced amid speculation that additional easing measures from today’s Bank of Japan meeting have already been priced in by investors. ADP Research Institute data showed U.S. companies boosted employment by 158,000 workers in March, less than the median forecast of 39 economists surveyed by Bloomberg who called for a 200,000 gain.

“The sell-off today is caused by the strong yen and lower- than-expected U.S. payroll data,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo.

Investors also reduced their positions in rubber amid holidays in China starting today and heightened tensions on the Korean peninsular, said Hiroyuki Kikukawa, general manager for research at Nihon Unicom Inc.

BOJ Governor Haruhiko Kuroda concludes his first policy meeting today after pledging to step up easing to defeat deflation and spur growth.

Output among the world’s top producers, representing 93 percent of global supplies, increased 3.1 percent to 10.6 million tons in 2012, according to the Association of Natural Rubber Producing Countries. That compared with growth of 8.6 percent a year earlier, it said.

China, Thailand

The contract for September delivery fell 1.1 percent to close at 21,340 yuan ($3,444) a ton on the Shanghai Futures Exchange yesterday. Stockpiles monitored by the bourse fell for the first time in nine weeks by 192 tons to 117,504 tons, down from the highest in three years last week, it said yesterday.

Thai rubber free-on-board was unchanged at 83.75 baht ($2.85) a kilogram yesterday, according to the Rubber Research Institute of Thailand. That is the lowest level since November 2009, according to data compiled by Bloomberg.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net


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