Rubber declined for the first time in four days, retreating from a four-month high, as data showed slower-than-estimated growth in U.S. personal incomes and the yen resumed a rally against the dollar.

Futures in Tokyo lost as much as 1.6 percent after yesterday reaching the highest level since April 30. The price is headed for the steepest monthly gain since December 2009.

The Japanese currency resumed its climb, threatening the nation’s export-led recovery, even after the Bank of Japan moved to expand its lending program. U.S. incomes rose 0.2 percent in July, less than the 0.3 percent median estimate of 66 economists surveyed by Bloomberg News.

“Investor appetite for risky assets waned as the U.S. data added to signals for an economic slowdown,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone. “Rubber was sold in tandem with stocks and oil.”

February-delivery rubber lost as much as 4.9 yen to 294.6 yen per kilogram ($3,492 a metric ton) before trading at 295.8 yen on the Tokyo Commodity Exchange at 12:07 p.m.

The yen appreciated to 84.39 per dollar from 84.62 in New York yesterday, weakening the appeal of yen-denominated contracts. Stocks and oil declined as the U.S. data heightened concern that the economic recovery may stall.

“People are concerned that the sluggish growth in U.S. personal spending would have a negative impact on the world economy because exports of Japan, China and other Asian countries count on it,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.

Auto-Sales Growth

In the cash market, prices in Thailand, the world’s largest rubber producer, surged 1.4 percent to 107.35 baht ($3.43) per kilogram yesterday, boosted by increasing demand from local and overseas processors following robust car-sales growth, according to the Rubber Research Institute of Thailand. Rains have disrupted tapping, limiting supplies, it said.

The price was also supported by speculation that supply from Indonesia, the second-largest rubber producer, may be disrupted because of the eruption of the Sinabung volcano on Sumatra Island. It erupted on Aug. 29 for the first time in 400 years, spewing ash and volcanic materials and prompting the evacuation of surrounding areas.

“The incident raised uncertainty about supply from Indonesia, although we have not yet heard of any real damage on production or shipments,” Saito at Fujitomi said.

January-delivery rubber on the Shanghai Futures Exchange lost 1 percent to 25,575 yuan ($3,757) a ton at 11:22 a.m. local time. China’s inventories shrank for the first week in five, dropping by 32 tons to 24,701 tons, the exchange said on Aug. 27, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin.

Source: Bloomberg

Rubber climbed for a third day, topping 300 yen per kilogram for the first time since April, as Japan’s central bank acted to stem the yen’s rally and on concerns over limited supply.

Futures in Tokyo gained as much as 1 percent to 302 yen a kilogram ($1,166 a metric ton), the highest level since April 30, extending last week’s 2.7 percent increase. The February- delivery contract settled at 299.5 yen on the Tokyo Commodity Exchange. The price has increased 8.5 percent this year.

The Bank of Japan expanded a bank-loan program, stepping up its monetary stimulus for the first time since March after the yen surged to a 15-year high and the government pressured the central bank to safeguard the recovery. The move follows signs the U.S. is also open to further monetary stimulus, with Federal Reserve Chairman Ben S. Bernanke saying three days ago that he has the tools to prevent another recession.

“The measures didn’t surprise the currency market, raising the possibility that the yen may strengthen,” Chaiwat Muenmee, analyst at Bangkok-based commodity broker DS Futures, said by phone today. “That’s why rubber closed off its high.”

The yen rose against the dollar, paring earlier gains in rubber, on speculation the Bank of Japan’s decision to increase credit-easing measures won’t be enough to weaken the Asian nation’s currency from near a 15-year high, reducing the appeal of yen-denominated contracts.

Yen Climbs

The Japanese currency climbed to 85.13 per dollar at 5 p.m. in Tokyo from 85.22 in New York last week, after earlier declining to 85.91, the weakest since Aug. 19.

January-delivery rubber on the Shanghai Futures Exchange gained 0.8 percent to close at 25,825 yuan ($3,797) a ton. China’s inventories shrank for the first week in five, dropping by 32 tons to 24,701 tons, the exchange said on Aug. 27, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin.

“A volcano in Indonesia may threaten supply availability, supporting rubber prices,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok. Indonesia is the second-largest rubber producer and exporter.

The Sinabung volcano on Sumatra island erupted on Aug. 29 for the first time in 400 years, spewing ash and volcanic materials and prompting the evacuation of surrounding areas.

Cash prices in Thailand surged 1.4 percent to 107.35 baht ($3.43) per kilogram, boosted by increasing demand from local and overseas processors following robust car sales growth, the Rubber Research Institute of Thailand said today on its website. Rains have disrupted tapping, limiting supplies, it said.

Source: Bloomberg

Rubber advanced for a second day, climbing to the highest level since April 30, as increased car sales in Japan and limited supply from Thailand boosted the appeal for the commodity used to make tires.

Futures climbed as much as 1.9 percent, completing a second weekly increase, after the Nikkei newspaper reported that new car sales in Japan from Aug. 1 to Aug. 23 surged 73 percent from the same period last year to more than 149,000.

Sales increased as consumers sought to benefit from a government subsidy program for fuel-efficient cars, which is scheduled to finish at the end of September, said Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co. Demand for rubber and other raw materials used in cars may be sustained at least until the program expires, he said.

“Consumers are advancing car purchases to take advantage of the subsidy program, which appears to have had a positive impact on raw-material demand,” Saito said today by phone.

The February-delivery contract rose as high as 299.7 yen per kilogram ($3,537 a metric ton) before settling at 298.9 yen on the Tokyo Commodity Exchange.

“A key driver today is limited supply as rainfall continues in southern Thailand,” the main production area of the largest exporter, Chaiwat Muenmee, an analyst at Bangkok- based DS Futures Co., said by phone today.

Cash prices in Thailand gained 0.2 percent to 105.85 baht ($3.36) per kilogram, driven by limited availability and demand from processors, the Rubber Research Institute of Thailand said yesterday. Some buyers have built up stockpiles before a new levy on Thai exports take an effect, the institute said.

A higher levy on Thai exports ranging from 0.9 baht to 5 baht a kilogram, based on a sliding scale of free-on-board prices, will take effect from Oct. 1, replacing the existing levy that ranges from 0.9 baht a kilo to 1.4 baht.

Heavy rainfall is likely across Thailand until the end of August, according to the Thai Meteorological Department. Rain disrupts tapping, leading to lower output.

January-delivery rubber on the Shanghai Futures Exchange gained 0.4 percent to close at 25,630 yuan ($3,770) a ton.

Source: Bloomberg

Rubber climbed for the first time in five days, nearing a three-and-a-half-month high, as demand from China, a weaker Japanese currency and crude oil gains enhanced the appeal of the commodity used to make tires.

Rubber futures surged as much as 3 percent after retreating to one-week low yesterday. The price has advanced 7.8 percent this month, headed for a second monthly gain.

“Physical buying coming from China gives the strength to the market,” Felix Yeo, trading manager at the Singapore unit of Marubeni Corp., said by phone today. Rising oil prices and a weakening yen also provide the support, he said.

The January-delivery contract settled at 294 yen per kilogram ($3,472 a metric ton) on the Tokyo Commodity Exchange after advancing to 294.9 yen, nearing a three-month high reached on Aug. 20. The February-delivery contract, which was listed on the bourse today, rose to 295.5 yen.

The Japanese currency weakened for a second day against the dollar amid speculation policy makers will take measures to curb an advance. The yen fell to 84.69 per dollar at 3:56 p.m. in Tokyo from 84.58 in New York yesterday.

Crude oil rose for a second day as U.S. equities climbed yesterday after a report that sales of new homes dropped in July to the lowest level on record. Rising oil prices improve rubber’s competitiveness against its synthetic rival.

China Stockpiles

China’s natural rubber inventories expanded for a fourth week, growing by 2,858 tons to 24,733 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Aug. 20.

The country is expected to import 135,000 tons of natural rubber in August and a further 130,000 tons in September, the Association of Natural Rubber Producing Countries said in its newsletter this month. China’s gross imports this year may rise 5 percent to 1.67 million tons, the association said.

“Thailand and Malaysia have been affected by some rains, raising supply concern,” Yeo said from Singapore. Rainfall disrupts tapping, lowering rubber output.

Heavy rainfall is likely across Thailand until the end of August, the Thai Meteorological Department said on its website.

Cash prices in Thailand climbed 0.8 percent to 105.6 baht ($3.36) per kilogram, driven by demand from rubber processors and limited supply availability, the Rubber Research Institute of Thailand said on its website today.

January-delivery rubber on the Shanghai Futures Exchange advanced 2.7 percent to 25,520 yuan ($3,753) a ton.

Source: Bloomberg

Rubber retreated to a one-week low as a record decline in U.S. home sales and slowing Japanese export growth added to evidence that the global economy is faltering, raising concerns demand for the commodity may weaken.

Japan’s export growth slowed for a fifth month in July, adding to threats to an economy already under pressure from the yen’s surge to a 15-year high against the dollar. The figures came out after a report showed yesterday that sales of previously owned homes in the U.S. slumped 27.2 percent in July, more than double a Bloomberg survey’s forecast.

Slowing overseas shipments in Japan and lower-than-expected U.S. home sales are “important” factors dragging the rubber market lower, Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co., said in an e-mail statement.

January-delivery rubber fell as much as 1.4 percent to 284.3 yen per kilogram ($3,361 a metric ton) on the Tokyo Commodity Exchange, the lowest level since Aug. 18, and settled at 286.3 yen. The August-delivery contract, which will expire today, advanced 3.1 percent to settle at 338.3 yen.

Japan’s exports advanced 23.5 percent in July from a year earlier, less than June’s 27.7 percent gain, the Finance Ministry said today. Exports fell 1.4 percent from a month earlier, the third monthly drop.

Today’s report adds to signs that Japan’s export-fueled rebound is losing steam after gross domestic product in the second quarter grew at the slowest pace this year. The yen’s advance is also threatening earnings of companies like Toyota Motor Corp. and Sony Corp., putting pressure on policy makers to curb the currency’s 9 percent appreciation this year.

Downside Limited

The U.S. National Association of Realtors reported yesterday that sales of existing homes plunged at a record pace of 27 percent in July after a revised 7.1 percent reduction in the previous month. The median forecast of 74 economists in a Bloomberg News survey was for a 13.4 percent drop.

“Bearish economic data has a psychological effect on the market, raising worries demand for rubber may slow,” Chaiwat Muenmee, an analyst at Bangkok-based DS Futures Co., said by phone today.

Price declines were limited as the yen retreated from a 15- year high against the dollar amid speculation the government may act to stem its rally, raising the appeal of yen-based contracts, Kikukawa said.

The yen declined after Japanese Finance Minister Yoshihiko Noda said he was prepared to take appropriate action on the currency when necessary. The yen fell to 84.54 yen per dollar from 83.90 yesterday, when it reached 83.60, the highest since June 1995.

“Supply remains low as rainfall continues in southern Thailand, providing support to rubber prices,” Chaiwat said.

In the cash market, Thai rubber prices fell 0.7 percent to 104.8 baht ($3.33) per kilogram, the Rubber Research Institute of Thailand said on its website today.

January-delivery rubber on the Shanghai Futures Exchange advanced 1.5 percent to close at 24,845 yuan ($3,655) a ton.

Source: Bloomberg