【Fujitomi】Tokyo Crude Oil Drops Sharply as Yen Strength and Overseas Crude Oil Weakness Deliver a Double Blow

（Tokyo Crude Oil and petroleum products）
On the 13th, Tokyo crude oil and petroleum products sharply fell due to a double punch of yen appreciation and overseas weakness. The September futures for crude oil were down 350 yen from the previous day at 37,650 yen, the October futures for gasoline were down 320 yen at 50,110 yen, and the October futures for kerosene were down 480 yen at 49,050 yen.
With the double punch of a retreating overseas crude market and rapid yen appreciation, the Tokyo oil market lost much of its value from the after-hours session. The early steady tone was erased, and with the yen accelerating higher, the declines widened. Trump’s remarks discouraging dollar strength prompted yen gains. In the morning, the yen advanced further, and as overseas oil markets were soft, Tokyo quickly posted new overnight lows and the decline widened. However, after 9:00, the downward momentum eased, and after 11:00, with WTI near-month May futures recovering to the 53-dollar range, the crude oil futures showed 37,500 yen in the 37,500 yen range. It is believed that WTI recovered in response to dollar weakness. China’s March trade surplus was strong, and crude oil imports increased, but this did not provide support to the overseas market. Therefore, the rebound to the 53-dollar range was an autonomous rebound, and trading in New York ahead of a three-day weekend was likely to consolidate. Although risk-taking ahead of the three-day weekend was expected, Middle East tensions had receded for the moment, so it was not seen as a geopolitical risk like gold. After 14:00, with the Bank of Japan’s ETF purchases in the background, the Nikkei stock average rapidly narrowed its losses, the yen weakened, and the crude oil futures showed the 37,600 yen range, further narrowing the downside.

（Tokyo Precious Metals）
On the 13th, Tokyo gold rose following the surge in NY gold, continuing its advance. The February futures for gold were up 18 yen from the previous day at 4,493 yen, and the February futures for platinum were up 13 yen at 3,415 yen.
Triggered by Trump’s remarks discouraging dollar strength, a broad dollar decline unfolded and yen rose rapidly. However, as NY gold advanced on the dollar’s weakness, Tokyo gold was bought further, moving above 4,490 yen. The strengthening yen continues to support a floor for Tokyo gold. The morning session also began around 4,490 yen. At 10:00, it briefly fell below 4,490, but with NY gold’s gains pausing, Tokyo gold pared its gains. NY gold reached around the $1,290 level before 11:00, but soon paused. With NY gold’s rally stalling for the moment, Tokyo gold’s 4,500 yen level was postponed, but 4,500 yen is viewed as a milestone. In after-hours trading, as hedging demand rises ahead of the holiday, 4,500 yen is expected to be reached.

（Tokyo Rubber）
On the 13th, Tokyo rubber rebounded from being oversold. The August futures were up 3.3 yen at 223.0 yen.
Although Tokyo rubber rose slightly in after-hours trading, the rapid yen appreciation in the morning forced declines, opening in negative territory, with the front-month hit the overnight low. At around 10:00, the Nikkei stock average fell further and yen rose, pushing the front-month briefly to 215.5 yen. But by 11:00, it recovered to the 220 yen range and even surpassed the previous night’s highs, signaling a revival after selling pressure. By midday, strong Chinese trade figures favored a rise to 223.7 yen. After 14:30, as the Nikkei narrowed its losses and yen weakened, the rubber market saw more buyers, pushing it higher.

（Tokyo Corn）
On the 13th, Tokyo corn faced a downbeat tone due to rapid yen appreciation. The March futures were unchanged from the previous day at 21,550 yen.
Chicago gains supported late-session strength, with the front-month extending to the 21,700 yen area in the after-hours. However, as Chicago closed higher and then yen strengthened sharply, the after-hours session ended with the front-month easing. In the morning, further yen appreciation pushed prices down. Given the previous day’s disregard for yen strength and the downtrend, a move below 21,500 yen was possible. In fact, after 9:00, it dipped below 21,500 yen due to yen strength and Chicago gains. With Chicago gains anticipated to remain, Tokyo prices briefly recovered to 21,500 yen, but the up-and-down pattern continued. The interaction of yen strength and Chicago gains suggested a cautious stance, and with Chicago set to be closed tomorrow, trading was expected to stay subdued. In the afternoon, a yen reversal supported a move higher, returning to unchanged levels.

（Tokyo Soybeans, U.S.）
On the 13th, Tokyo soybeans held steady, supported by Chicago gains rather than yen strength. The February futures were up 420 yen from the previous day at 46,930 yen.
Chicago’s sharp rise encouraged Tokyo to extend gains in after-hours trading. In the morning, further yen appreciation occurred, but there was no sign of selling pressure. The resumed Chicago soybeans continued to rise, and as a result, yen strength did not become a selling factor. The price remained high as delivery approached in the near term.
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