【Fujitomi】Tokyo oil market falls across the board as markets dislike the strong yen and weakness overseas

（Tokyo Crude Oil and Petroleum Products）
On the 17th, Tokyo crude oil and petroleum products tumbled due to overseas crude oil weakness and a stronger yen at the start of the week. The September contract for crude oil futures fell 830 yen from the previous week’s close to 37,010 yen, the October contract for gasoline futures fell 820 yen to 50,210 yen, and the October contract for kerosene futures fell 700 yen to 48,370 yen.
Overseas crude oil is expected to retreat after the holidays. It is believed that the price collapse was driven by recognizing increased U.S. crude supply. Although risk buying had some support due to geopolitical risks, the unwinding of that risk buying contributed to another drop in overseas crude oil at the start of the week. The Tokyo market faced a double blow from soft overseas crude and a rising yen, and the downside accelerated from the morning. Although Tokyo had surged on expectations at last Friday’s close, those gains now look insufficient given the subsequent declines. The crude oil futures fell to 37,010 yen but managed to hold above 37,000 yen. In the daytime, they recovered somewhat on the weaker yen and the smaller drop in WTI, but in Tokyo, where buys were aggressively pursued, prices remained relatively high still.

（Tokyo Precious Metals）
On the 17th, Tokyo gold was sharply sold off due to the stronger yen. The February contract for gold futures fell 22 yen from the previous week’s close to 4,475 yen, and the February contract for platinum futures fell 23 yen to 3,395 yen.
After the holidays, New York gold surged further, approaching the 1,300-dollar level. However, Tokyo gold softened from the outset due to the advancing yen, and after 10 o’clock the downside widened. The smaller gains in New York gold contributed to Tokyo gold’s larger declines, but further yen gains also provided selling pressure. The U.S. currency report for the weekend indicated a yen level around two-tenths of a dollar, suggesting continued yen appreciation, which is expected to become a resistance for Tokyo gold for a while, leading to selling. In the morning, gold briefly dipped below 4,480 yen. New York gold fell below 1,290 dollars just before 15:00, but profit-taking on risk reduction emerged, and with the yen still high, Tokyo gold widened its losses and settled in the 4,470 yen range.

（Tokyo Rubber）
On the 17th, Tokyo rubber saw near-month highs and far-month lows. The August contract for far-month delivery fell 2.0 yen to 216.5 yen.
Although the near month rose sharply, selling centered on the front month was restrained. In the 10 o’clock hour, the front-month contract rose to the 221 yen range, supported by positive sentiment from Shanghai Rubber. However, the rebound was limited, and the yen remained firm, leading to selling pressure around noon. By early afternoon, the price fell to the 216 yen range, down about 5 yen from the morning high. The downside continued toward the close, with expectations of slipping below 215 yen.

（Tokyo Corn）
On the 17th, Tokyo Corn fell due to a firmer yen and Chicago price declines. The March contract for futures fell 210 yen from the prior week to 21,350 yen.
In the morning, selling pressure rose as the yen strengthened, and the March front-month opened at 21,500 yen, then quickly erased to 24,500 yen. It subsequently recovered to the 21,500 yen level amid expectations of Chicago gains after the holidays, with speculative buying. However, further yen appreciation and renewed Chicago declines led the front-month to dip below 21,500 yen by noon. Chicago initially rose but then fell again. Rainfall in the U.S. Corn Belt was worse than expected, triggering disappointment selling. Considering the yen strength and Chicago declines, Tokyo remained comparatively resilient at the start of the week, reflecting a rebound from the prior Friday’s sharp declines. Attention turned to the progress of sowing and planting, to be announced in the morning. Shortly before 14:00 the front-month fell below 21,400 yen, but after 15:00 the futures were pushed down significantly.

（Tokyo U.S. Soybeans）
On the 17th, Tokyo ordinary soybeans declined mainly in the front-month. The February contract for soybeans fell 450 yen from the previous week to 46,630 yen.
The new harvest April contract began trading, but with limited confidence driven by small gains. Other contracts softened due to the advancing yen, with the February contract, which had been the weakest, plunging sharply. The gap with the new harvest April contract has become overly stretched. Given the demand-supply balance surrounding Chicago, selling is considered safe, but for a while liquidity remains a priority.
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