Rubber prices continued the correction on the third day in a row, Thursday (25/1/2018), following the strengthening of the yen and high reserves.
The price of rubber for delivery in June 2018, the most-active contract on the Tokyo Commodity Exchange (Tocom), closed down 0.2% or 0.40 points to 203.7 yen per kilogram (kg).
Previously, June rubber contract price opened stagnant at position 204.10 after trading Wednesday (24/1/2018) ended down 1.21% or 2.50 points at 204.10 position.
According to Kazunori Kokubo, Managing Director of Yutaka Shoji in Singapore, the rubber market has weighed on the abundance of rubber stock levels and the continued appreciation of the yen. The rubber stocks monitored by the Shanghai Futures Exchange reported up 2.6% to 415,415 tonnes last week.
Meanwhile, based on data from the Rubber Trade Association of Japan, rubber inventories in Japanese warehouses rose 14.4% to 12,267 tons as of December 31, 2017 compared to levels reached on December 20.
The yen appreciated 0.16 percent or 0.18 points to 109.04 per dollar, after trading on Wednesday (24/1) ending up 0.98 percent or 1.08 points at 109.22.
As is known, the movement of rubber prices is usually inversely proportional to the yen. The strengthening 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.
"However, adjusting positions by some market participants over the closing term of the contract limits the weakening [rubber price]," Kokubo added, as quoted
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