Rubber prices slumped to the red zone by more than 1% in today's trading on Monday (2/4/2018), weighed by concerns about demand for the commodity.
The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 1.3% or 2.40 points to 181.60 yen per kilogram (kg).
In fact, rubber prices had resumed gains in the green zone after opening with an increase of 0.33% or 0.60 points at the level of 184.60 yen per kg.
On Friday's trade (30/3) rubber price for September 2018 contract finished up 1.10% or 2 points at the level of 184 yen per kilogram (kg).
According to Naohiro Niimura, a partner at Market Risk Advisory research firm, the release of Tankan data by the Bank of Japan (BOJ) today raises concerns about rubber demand.
The sentiment of confidence among major Japanese manufacturers slipped from the highest level in more than a decade in the first quarter of 2018, due to the burden of currency appreciation that depressed the earnings outlook.
The business sentiment index, according to the BOE BOE's Tankan survey, fell to 24 in the first quarter, lower than analysts' forecast of 25 at the same time at 26 levels in the previous quarter.
Meanwhile, the outlook among large producers and for large non-producers fell to 20 each. Among small firms, producer sentiment indexes did not change at level 15, while non-producer firms rose to 10 from 9.
On the other hand, today's yen exchange rate was weakened 0.02% or 0.02 points to 106.3 position per US dollar at 14:59 pm, having ended up 0.14% at 106.28 on Friday trading ( 30/3).
"At the same time, [rubber prices are weighed] rising supply concerns as exporters continue their export activity," Niimura added.
As is known, the program of export restrictions by a number of major producing countries namely Thailand, Indonesia and Malaysia has ended on March 31
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