Rubber rose to a four-week high as the Japanese currency headed for a fifth weekly decline, increasing the appeal of yen-based futures.

The contract for delivery in May on the on the Tokyo Commodity Exchange rose as much as 2.6 percent to 265.3 yen a kilogram ($2,587 a metric ton), the highest since Oct. 31, before trading at 264.2 yen at 11:51 a.m. local time. Futures have gained 0.9 percent this month, paring this year’s losses to 13 percent.

The yen fell to 102.61 per dollar, the lowest level since May 23, after Japanese government data showed inflation quickened last month.

“Weak yen is a factor for strong rubber,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo. “It’s good timing for yen-denominated funds to buy rubber at the moment.”

The contract for May delivery on the Shanghai Futures Exchange added 0.6 percent to 19,380 yuan ($3,180) a ton. Thai rubber free-on-board added 0.4 percent to 79.2 baht ($2.47) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: http://www.bloomberg.com