BLBG: Rubber May Climb as Yen Drops From 15-Year High on Intervention
By Aya Takada
Sept. 15 (Bloomberg) -- Rubber, little changed, may climb for a third day, as the yen retreated from a 15-year high against the dollar on Japan’s first intervention in the currency market since 2004.
Futures in Tokyo advanced to the highest level in almost a week after earlier declining by as much as 0.9 percent. The appeal of yen-denominated contracts increased as the Japanese currency declined from the highest level since May 1995.
Finance Minister Yoshihiko Noda confirmed Japan acted to stem the yen’s rally that threatened to stunt the nation’s export-led economic recovery. The step came a day after Prime Minister Naoto Kan was re-elected as head of Japan’s ruling party. The Nikkei-225 Stock Average rallied as much as 2 percent, led by exporters such as Canon Inc. and Toyota Motor Corp.
“Futures reacted to the movement in the currency market,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone. A weaker yen is positive for Japan’s export-dependent manufacturing industries, supporting raw- material demand, he said.
February-delivery rubber gained as much as 0.9 yen to 298 yen per kilogram ($3,526 a metric ton) before trading at 297 yen on the Tokyo Commodity Exchange at 12:28 p.m. local time. The contract has advanced 7.6 percent this year.
The yen was at 84.78 to the dollar after earlier trading at 82.88, the highest since May 1995. Bank of Japan Governor Masaaki Shirakawa said today in a statement that he hopes the intervention will stabilize the foreign exchange market.
‘Too Late’
“With today’s action, the Japanese government has shown its resolve to halt a hazardous rise in the value of the yen,” said Daisaku Ueno, Tokyo-based president at Gaitame.com Research Institute Ltd. “The action was too late but better than nothing.”
Gains in rubber futures were limited as crude oil declined for a second day, cutting the cost of making rival synthetic products used in tires.
Oil extended its decline after an industry report showed U.S. crude stockpiles rose and as Enbridge Energy Partners LP said it expected to finish welding a replacement section into a pipeline that was shut last week.
March-delivery rubber on the Shanghai Futures Exchange dropped 0.5 percent to 25,525 yuan ($3,789) a ton.
To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net
