Rubber was unable to extend its gains and ended in negative territory in trading today, Friday (5/1/2018), depressed investors selling ahead of the long weekend holiday.
The June rubber price movement for delivery in June 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 1.01% or 2.10 points at 204.80 yen per kilogram (kg).
Previously, June's rubber contract price opened with a slight increase of 0.05% or 0.10 points at 207, after trading on Thursday (4/1) was able to book a 0.1% rebound or 0.20 point at 206.90 yen kg.
Naohiro Niimura from Market Risk Advisory research firm said the weakening of rubber prices was triggered by investors selling ahead of the coming day or maturity day. Maturity Day is an official holiday in Japan that falls on Monday of the second week in January.
"Investors are still worried that China will tighten its monetary policy, triggering pressure on demand," said Niimura, as quoted by Bloomberg.
In December 2017, China's central bank raised borrowing costs after the US central bank decided to tighten its monetary policy.
"With only a five basis point increase, the central bank [China] does not want to endanger the market with an aggressive rise. This shows a tightening bias of policy makers and this attitude will continue in 2018, "said Raymond Yeung, China's chief economist at Australia & New Zealand Banking Group Ltd.
In line with rubber, West Texas Intermediate oil prices for February delivery in 2018 slipped into the red zone with a weakening 0.27% or 0.17 points to as low as US $ 61.84 per barrel at 14.15 WIB, after trading on Thursday (4/1) ) ended up 0.62% at 62.01.
Rubber prices sagged although at the same time the performance of the Japanese yen continued to weaken. The yen continued to appreciate 0.28% or 0.32 points to 113.07 per US dollar at 14.23 WIB, after Thursday (4/1) ended down 0.21% at 112.75.
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