By Aya Takada June 3 (Bloomberg) -- Rubber climbed for the first time in three days as a weaker Japanese currency raised the appeal of yen-based contracts and a rally in Asian stocks boosted investor confidence in an economic recovery. Futures in Tokyo gained as much as 2.1 percent after slumping 5.6 percent in the previous two days. The Japanese currency extended declines as political uncertainty in Japan and signs the U.S. economy is gaining traction tilted demand toward higher-yielding assets. Asian stocks rallied the most in more than three months as rising sales of U.S. homes and cars bolstered confidence in the global economy. Equities are rebounding following the biggest monthly drop in 19 months in May as U.S. industry reports indicate consumer demand is recovering before data due today that will probably show an improving job market. “Rubber chased a rally in stocks and benefitted from a weaker yen,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone. “Buying was not aggressive amid expectation that rubber supply will increase seasonally.” Rubber for November delivery, the most-active contract, rose as much as 5.7 yen to 274.9 yen per kilogram ($2,983 a metric ton) before trading at 270.8 yen on the Tokyo Commodity Exchange at 12:59 p.m. local time. The yen weakened against all major peers and was at 92.19 versus the dollar, from 92.13 in New York yesterday, when it touched a two-week low. Cash prices of natural rubber in Thailand, the world’s largest exporter of the commodity, may decline as production increases this month, according to the Thai Rubber Association. Output may exceed 200,000 tons a month in June and July, up as much as 30 percent from a low-production period in April and May, the group’s President Luckchai Kittipol said. Output this year may be 3.2 million tons, matching that of 2009, he said. Homes Boost The MSCI Asia Pacific Index advanced 2.6 percent to 113.65 as of 1:02 p.m. in Tokyo. An index of pending U.S. home resales climbed 6 percent in April, the National Association of Realtors said, exceeding the median forecast of economists surveyed by Bloomberg News. “The data provides assurance that the U.S. economy is improving and that’s boosting investor sentiment,” said Yoshihiro Ito, a senior strategist at Okasan Asset Management Co., which oversees about $10 billion in Tokyo. September-delivery rubber on the Shanghai Futures Exchange lost 5 yuan to 22,110 yuan ($3,237) a ton as of the 11:30 a.m. local-time break. To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net;

Source