BLBG:Rubber Declines for Second Day as Expectations for Stimulus Fade
Rubber declined for a second day after the Federal Reserve damped expectations for monetary stimulus, sending the dollar higher and weakening investor demand for commodities as alternative assets.
September-delivery rubber dropped as much as 1.5 percent to 326 yen a kilogram ($3,945 a metric ton), the lowest level since March 30, before trading at 326.3 yen on the Tokyo Commodity Exchange at 10:43 a.m. China’s markets are closed for a holiday.
Asian stocks extended a global sell-off after Federal Reserve minutes showed central bankers saw no need for more U.S. stimulus unless the economy weakened. The dollar rallied to a one-week high against the euro while oil traded near a two-day low in New York, cutting the appeal of natural rubber as an alternative to synthetic products used in tires.
“The Fed minutes disappointed investors who had braced for further monetary easing,” Ken Kajisa, an analyst at broker ACE Koeki Co. in Tokyo, said by phone today. “Rubber was sold in tandem with other industrial commodities.”
Losses in futures were limited after data showed U.S. sales of cars and light trucks rose 13 percent in March, sending the industry to the best quarterly pace since 2008.
Deliveries accelerated to a 14.4 million seasonally adjusted annual rate from 13.1 million a year earlier, according to researcher Autodata Corp. Automakers and analysts are increasing their projections for full-year industry sales, citing pent-up demand from consumers who delayed purchases during the recession.
Thai rubber on free-on-board basis was unchanged at 122.55 baht ($3.96) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The price was supported by a government policy to boost domestic prices through purchases and tree-cutting programs, according to Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.
To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net;
To contact the editor responsible for this story: Jarrett Banks at jbanks15@bloomberg.net
