Rubber price movements ended lower on trading today, Thursday (10/08/2017), along with the continued appreciation of the Japanese yen currency that triggered a selloff.
The price of rubber for January delivery in 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 0.60% or 1.30 points at 214.10 yen per kilogram (kg).
Previously, rubber prices opened with a 0.37% rise at 216.20 yen per kg position, after trading on Wednesday (9/8) ended up 2.67% at 215.40.
"Investors are selling this commodity amid a stronger yen ahead of a long weekend holiday," said Gu Jiong, an analyst with Yutaka Shoji, as quoted by Bloomberg. Trading activity on the Japanese market will be canceled tomorrow due to the national holiday.
The yen today appreciated 0.07% or 0.08 points to 109.98 yen per dollar at 14.25 Western Indonesia time, after Wednesday closed up 0.24% at 110.06.
The yen was boosted by escalating tensions between the US and North Korea. The Nikkei Stock Average Volatility Index jumped 38 percent yesterday after US President Donald Trump vowed that North Korea's threat will be responded with enormous anger.
The yen's strength against the US dollar today eroded after US Secretary of State Rex Tillerson sought to ease concerns about the potential for armed conflict with North Korea.
As is known, the strengthening of the Japanese yen exchange rate against the US dollar makes the price of commodities traded in this currency to be relatively more expensive for overseas buyers. As a result, demand for these commodities has the potential to decline.
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