Bloomberg Rubber Advances to One-Week High as Weaker Yen Boosts Appeal

Feb. 25 (Bloomberg) -- Natural rubber futures climbed to the highest in a week after the Japanese currency reached a three- month low against the dollar, making yen-denominated contracts more attractive to investors.

The yen weakened to 96.93 against the dollar yesterday, the weakest level since Nov. 25 as Japan’s deteriorating economy eroded the currency’s appeal as a refuge from the global financial crisis. Futures in Tokyo often move in the opposite direction to the yen as rubber trades globally in dollars.

Prices advanced as the biggest gain in U.S. stocks in a month yesterday eased concern a worsening economic slump may weaken demand for the commodity used in car tires. Stocks halted a six-day decline after Federal Reserve Chairman Ben S. Bernanke’s statement that banks need not be nationalized helped lift equities from their lowest valuations in two decades.

Rubber for August delivery, the most-active contract, gained as much as 6.6 percent to the highest since Feb. 18 before trading at 139.8 yen a kilogram ($1,450 a metric ton) on the Tokyo Commodity Exchange at 9:53 a.m. local time.

To contact the reporters on this story: Aya Takada in Tokyo atakada2@bloomberg.net;