The price of rubber ended lower in trading today, Tuesday (08/05/2018), after weighed down by the appreciation of Japanese yen exchange rate.
The price of rubber for delivery in October 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 0.93% or 1.8 points at 191.70 yen per kilogram (kg).
On Tuesday (8/5) morning, rubber opened in the red zone with 0.05% down or 0.1 point at 193.4 position, after earlier able to book rebound by ending up 0.78% or 1.5 points in level of 193.5 on Monday trading (7/5).
Meanwhile, today's yen exchange rate continued to strengthen 0.15% or 0.16 point to 108.93 position per US dollar at 14.02 WIB, after expiring slightly appreciated 0.03% or 0.03 point at level 109, 09 on Monday trading (7/5).
The yen strengthened as investor appetite for riskier assets receded amid concerns over US President Donald Trump's announcement plan about Iran's nuclear deal.
In its Twitter account yesterday, Trump said it would announce a decision on the future of an international nuclear deal with Iran on Tuesday (8/5) local time.
He has repeatedly threatened to withdraw from the deal, which contains an agreement for Iran to limit its nuclear activities in return for the lifting of economic sanctions. Except, the delegation of a number of European countries that also signed the agreement improved what he called a weakness in the agreement.
The attractiveness of the yen as a safe haven asset tends to rise amid rising global tensions that drove investors away from riskier assets.
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.
In line with rubber, West Texas Intermediate (WTI) oil prices for June delivery fell 0.75 percent to $ 70.20 a barrel on the New York Mercantile Exchange at 13:52 pm.
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