The price of rubber rebounded and ended up more than 1% in today's trading on Monday (26/3/2018), as the weakening performance of Japanese yen currency potentially boosted demand.
The price of rubber for delivery in August 2018 at Tokyo Commodity Exchange (Tocom), closed up 1.15% or 2 points to 176.50 yen per kilogram (kg).
Previously, the price of rubber opened with a 0.29% increase or 0.50 points at 175 yen per kg, after trading on Friday (23/3) was able to end 6.83% or 12.80 points at 174.50.
Meanwhile, the yen exchange rate was down 0.33% or 0.35 points to 105.08 per US dollar at 13:58 pm, having ended up 0.52% at 104.73 on Friday (23/3) .
Reported by Bloomberg, the yen weakened with US bonds after US Treasury Secretary Steven Mnuchin expressed optimism that the US could reach an agreement with China over trade tariffs. This optimism reduces the demand for safe-haven assets.
Japan's currency weakened against a basket of major currencies after The Wall Journal Street reported that China and the US are quietly beginning to negotiate to improve American access to the Chinese market, citing related sources.
"Mnuchin said he believes the US and China can reach an agreement on trade. It provides support for risky asset sentiment, "said David Forrester, a strategist at banking unit-investment and Credit Agricole corporation in Hong Kong. "Rising risk sentiment has led to a weaker yen," he added, as quoted by Bloomberg.
As is known, 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.
In line with the rubber, the Nikkei 225 index was able to book a rebound and ended up 0.72% or 148.24 points at 20,766.10, after opening with a weakening of 0.94% or 194.49 points at 20,423.37.
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