Dec. 19 (Bloomberg) -- Rubber in Tokyo climbed to near a three-month high after the Federal Reserve decided to reduce stimulus, sending the Japanese currency to a five-year low against the dollar and boosting the appeal of yen-based futures.
The contract for delivery in May on the Tokyo Commodity Exchange gained 0.2 percent to end at 280.6 yen a kilogram ($2,698 a metric ton), nearing the three-month high of 287.9 yen at close reached on Dec. 16. Futures pared losses for this year to 7.2 percent.
The Fed is trimming its monthly bond purchases to $75 billion from $85 billion, taking the first step toward unwinding the unprecedented stimulus that Chairman Ben S. Bernanke put in place to help the economy recover from the worst recession since the 1930s. The yen slid to 104.37 per dollar, the lowest level since October 2008, while Asian stocks extended a global rally.
“A weakening yen gave a boost to futures in Tokyo,” said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo. “A rally in global stocks raised investor confidence in the economic recovery, providing support to commodities.”
The contract for May delivery on the Shanghai Futures Exchange dropped 0.5 percent to close at 19,055 yuan ($3,138) a ton. Thai rubber free-on-board was unchanged at 82.85 baht ($2.56) a kilogram today, according to the Rubber Research Institute of Thailand. Gains in prices were limited because of the high level of stockpiles in China and Japan, showing sluggish demand, the group said.
--With assistance from Supunnabul Suwannakij in Bangkok. Editors: Jarrett Banks, Jake Lloyd-Smith