Natural rubber futures in Tokyo, the global benchmark, climbed to their highest in more than 15 months as crude oil rose to a record for a third day, prompting the investors to buy commodities as a hedge against inflation. | |
| Crude oil rose above $93 a barrel in New York after Mexico shut down a fifth of its production because of a storm and the dollar fell to a record low against the euro ahead of a Federal Reserve meeting this week. |
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| "Investors were buying rubber as crude oil topped $93 and gold rose beyond $790,'' said Shuji Sugata, research manager at Mitsubishi Corporation Futures & Securities in Tokyo. |
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| "Money is flowing into commodities amid expectations that Fed will lower the interest rates,'' he said. |
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| Natural rubber for April delivery rose as much as 9.5 yen, or 3.3 per cent, to 300 yen a kilogram ($2,628 a metric tonne) on the Tokyo Commodity Exchange, the highest for the most-active contract since July 6, 2006. It closed up 7.2 yen at 297.7 yen. |
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| Commodities futures drew support from prospects that Fed will reduce its 4.75 per cent overnight lending rate between banks by at least a quarter-percentage point on October 31, said Jun Nishimuta, an analyst at Kanetsu Asset Management in Tokyo. |
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| "Investors are shifting money into commodities'' as lower interest rates and a weakening dollar make dollar-based assets less attractive, Nishimuta said by phone today. |
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| The dollar fell as low as $1.4438 a euro, the weakest since the introduction of the European currency in 1999, before trading at $1.4425 at 5:54 pm Tokyo time. |
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| Rubber futures were bought as output in Thailand, the world's largest producer and exporter of the commodity, slowed after wet weather disrupted plantation work, Nishimuta said. |
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| Volumes of the raw material traded on three major markets in Thailand "" Hatyai, Surat Thani and Nikon S Thammarat "" averaged 110.5 tonnes a day in the week ended October 26, down 26 per cent from the average of 148.6 tonnes a week earlier, according to the web site of Southland Rubber, a Thai rubber shipper. |
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| "I believe the volume last week was about one-third of the average volume a year earlier,'' Nishimuta said. Natural rubber futures for January delivery on the Shanghai Futures Exchange gained 515 yuan, or 2.3 per cent, to settle at 22,840 yuan ($3,055) a tonne. |
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