Sept. 11 (Bloomberg) -- Rubber climbed as the yen weakened to the lowest level in seven weeks after the U.S. called for a pause in authorizing military strikes on Syria, boosting demand for the commodities priced in the Japanese currency.
The contract for February delivery gained 0.2 percent to close at 283 yen a kilogram ($2,825 a metric ton) on the Tokyo Commodity Exchange. The advance pared losses to 6.5 percent this year.
The yen dropped against the dollar after U.S. President Barack Obama asked Congress to delay a vote on military action against Syria, and a worldwide equity rally eroded demand for Japan’s currency as a haven. The yen fell 1.7 percent in the past week, the biggest loss among 10 developed market currencies tracked by Bloomberg Correlation Weighted Indexes.
“A weakening yen helped boost gains in commodities in Japan,” Gu Jiong, an analyst at broker Yutaka Shoji Co., said by phone from Tokyo.
Thailand, the world’s largest rubber producer and exporter, will double the subsidy paid to farmers to 21.2 billion baht ($660 million) after they threatened to step up protests across the nation’s key plantation areas, Deputy Government Spokesman Chalitrat Chandrubeksa said yesterday. The subsidy is equivalent to a rubber price of 12 baht per kilogram, according to the government.
Thai rubber free-on-board was unchanged at 86.15 baht a kilogram today, according to the Rubber Research Institute of Thailand. The contract for January delivery in Shanghai rose 0.9 percent to 20,735 yuan ($3,388) a ton.
--Editors: Thomas Kutty Abraham, Ovais Subhani