The price of rubber recorded a weekly decline, although it managed to close higher on Friday (2/2/2018), due to the negative sentiment from rising reserves in China and Japan.
The price of rubber for delivery in July 2018 at Tokyo Commodity Exchange (Tocom), closed up 1.76% or 3.40 points to 196.90 yen per kilogram (kg). Since the beginning of this week, rubber prices have declined by 4%.
Previously, the July rubber contract price movement opened in the red zone with a weakening 0.47% or 0.90 points at 192.60 position. In trading Thursday (1/2), this commodity managed to book a rebound with a rise of 0.31% or 0.60 points at 193.50 yen per kg position.
According to Kazuhiko Saito, an analyst at Fujitomi brokerage firm, rubber prices on the Tocom bourse are affected by rising rubber stocks in China and Japan.
China's rubber stocks monitored by the Shanghai Futures Exchange increased 0.9% last week to 419,310 tonnes. The Rubber Trading Association of Japan recorded an increase in rubber stock by 8.2% to 13,307 tons.
Meanwhile, the yen exchange rate was observed to weaken 0.38% or 0.42 points to 109.82 position per US dollar at 13:56 pm, the weakening on the third day in a row. On Thursday (1/2), the yen ended down 0.19% or 0.21 point at 109.40 position.
As is known, the movement of rubber prices is usually inversely proportional to the yen. The weakening Japanese yen exchange rate against the US dollar makes the price of commodities traded in this currency to be relatively cheaper for overseas buyers. As a result, demand for these commodities has the potential to increase.
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