Jan. 8 (Bloomberg) -- Rubber rose for the first time in four days in Tokyo, recovering from a three-month low, as a weakening yen boosted the appeal of the commodity used in tires.
Futures for June delivery on the Tokyo Commodity Exchange climbed 0.4 percent to settle at 255.3 yen a kilogram ($2,432 a metric ton). Futures yesterday fell 3.2 percent to 254.3 yen, the lowest close for a most-active contract since Oct. 4.
The Japanese currency dropped for a second day against the dollar before the Federal Reserve releases minutes of its policy meeting last month as investors weigh the pace of stimulus tapering by the central bank.
“The weakening yen prompted some investors to cover their short positions,” said Gu Jiong, an analyst at Yutaka Shoji Co., a broker in Tokyo. “The trend of a strong dollar and a weak yen is likely to continue, providing support to rubber.”
The contract for May delivery on the Shanghai Futures Exchange dropped for a seventh day, falling 0.5 percent to 16,735 yuan ($2,765) a ton, the lowest close for a most-active contract since September 2009.
“There was increased selling in the spot market in China today because traders expect more shipments to arrive in Qingdao and bonded warehouses there are nearly full,” said Zhao Cheng, an analyst at Zhongcai Futures Co. in Chongqing. “That dragged down futures prices. The ample supply is all the worse with a lack of demand from tiremakers as they refrain from restocking.”
Rubber free-on-board fell for a fifth session, dropping 1 percent to 78.15 baht ($2.36) a kilogram today, according to the Rubber Research Institute of Thailand.
--With assistance from Feiwen Rong in Beijing. Editors: Jarrett Banks, Brett Miller