Dec. 17 (Bloomberg) -- Rubber in Tokyo declined the most in three weeks as Japan’s currency rebounded from a five-year low before a U.S. Federal Reserve policy meeting today, cutting the appeal of the yen-denominated commodity.
Futures for delivery in May on the Tokyo Commodity Exchange dropped 0.9 percent to end at 281.1 yen a kilogram ($2,730 a metric ton) after rising 1.1 percent earlier today. The most- active contract touched 287.9 yen yesterday, the highest intra- day level since Sept. 9.
The Fed may begin cutting economic stimulus at its Dec. 17-18 meeting, according to 34 percent of economists in a Dec. 6 Bloomberg survey, up from 17 percent in a Nov. 8 poll.
“The strengthening yen prompted investors to take profits while waiting for the result of Fed meeting,” Navarat Kaewpratarn, a senior marketing official at Future Agri Trade Co., said by phone from Bangkok. Losses were capped by speculation of increasing Chinese demand, she added.
China, the largest rubber consumer, bought 87,200 tons for government stockpiles yesterday, said three executives with direct knowledge of the transactions. Car sales in China surged 14 percent in November to 2 million units, China Automotive Information Network said today.
Thailand, the biggest rubber producer, will resume collecting fees on shipments from January after a four-month exemption, according to Office of the Rubber Replanting Aid Fund.
The contract for May delivery on the Shanghai Futures Exchange fell 1.9 percent to close at 19,410 yuan ($3,197) a ton. Thai rubber free-on-board dropped 0.4 percent to 83.35 baht ($2.60) a kilogram today, according to the Rubber Research Institute of Thailand.
--Editors: Alexander Kwiatkowski, Jarrett Banks