Rubber prices continued to strengthen on the third day in a row on Wednesday (21/2/2018), along with the continued depreciation of the yen against the US dollar.
The price of rubber for delivery in July 2018 at Tokyo Commodity Exchange (Tocom), closed up 1.20% or 2.20 points to 186.00 yen per kilogram (kg).
Previously, the July rubber contract price opened with a 0.11% rise or 0.20 point at 184 per kg position, having ended up 0.66% or 1.20 points at 183.80 yen per kg on Tuesday trading (20 / 2).
According to Kazuhiko Saito, an analyst at brokerage firm Fujitomi in Tokyo, the strengthening of rubber prices is supported by the weakening performance of the yen and rising stock indices in Japan.
The yen continued to depreciate for the fourth straight day of trading, weakening 0.37% or 0.40 points to 107.73 per dollar at 14.17 Western Indonesia Time, after falling 0.69 yesterday % at position 107.33.
As is known, the movement of rubber prices is usually inversely proportional to the yen. The weakening yen gives fresh winds for rubber and can lift up the price of this commodity by the potential increase in demand from buyers.
Japan's Nikkei 225 index closed up 0.21% or 45.71 points to 21,970.81.
"However, the strengthening of rubber may be limited by the sentiment of high reserve levels," added Saito, as quoted by Bloomberg.
China's rubber reserves monitored by the Shanghai Futures Exchange increased 0.5% last week to 434,330 tons, the 12th consecutive weekly rise.
In contrast to rubber, WTI oil price of April 2018 contract today was down 0.89% or 0.55 points to US $ 61.24 per barrel at 10:18 pm.
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