[Fujitomi] Tokyo Gold rebounds, but gains narrowed

（Tokyo crude oil and petroleum products）
On the 18th, Tokyo crude oil and petroleum products rebounded on the back of a weaker yen. Crude oil futures for September rose 360 yen from the previous day to 37,370 yen, gasoline futures for October rose 210 yen to 50,420 yen, and kerosene futures for October rose 250 yen to 48,620 yen.
In the Tokyo oil market, during the night session the yen depreciation supported a rebound. WTI near-month June futures fell to as low as $53.02 but managed to hold above $53. The comments by U.S. Treasury Secretary Mnuchin calling for a strong dollar further accelerated the yen’s weakness, providing strong support for the Tokyo oil market. The yen’s depreciation was also a support during the daytime trading, but upside in WTI was heavy and the Tokyo market could not ride the yen’s wave. WTI near-month June futures fell below $53 in the 11 o’clock hour, updating the previous day’s low. Fearing this overseas crude oil decline, Tokyo crude dipped below 37,300 yen. In the afternoon, as WTI near-month June futures recovered to around $53, Tokyo crude recovered to around 37,400 yen. Attention also turned to the U.S. API inventory statistics due to be released the next morning; looking at overseas crude oil trends, even if the report pushes prices higher, it may still present a selling opportunity in Tokyo.

（Tokyo precious metals）
On the 18th, Tokyo gold rebounded on the yen’s depreciation. Gold futures for February rose 14 yen to 4,489 yen, and platinum futures for February rose 57 yen to 3,452 yen.
Tokyo gold was bought back on the back of the yen’s depreciation. With the dollar weakening, New York gold lost much of its value, but the yen’s depreciation sufficiently offset this, leading Tokyo gold to rebound. After 10 o’clock, as NY gold pared its losses, Tokyo gold extended its gains. Tokyo platinum surged in the morning as NY platinum was driven by technical buying, with yen depreciation contributing to Tokyo platinum’s sharp rise. However, NY platinum failed to sustain the technical buying given weak fundamentals, and it subsequently fell, so Tokyo platinum’s sharp rise is likely to become a selling opportunity going forward. Tokyo gold rose to 4,495 yen in the 10 o’clock hour but then slipped 10 yen from the high before noon. With yen’s slip easing, NY gold was again sold off. Toward the close, Tokyo gold managed to regain to around 4,490 yen, but the upside move was somewhat surprising in its pattern.

（Tokyo Rubber）
On the 18th, Tokyo rubber’s nearby month dropped sharply while the other months followed suit with declines. The August futures for near month fell 3.6 yen to 212.9 yen.
Although the near month had surged the previous day, there were few buyers, so it fell sharply. Fearing the near month’s drop, the next month fell below 215 yen after 11 o’clock. As the near month’s decline widened, the futures months fell further, with the next month showing 211.5 yen after 1 o’clock. There were concerns about heavy deliveries for near month, triggering a sharp drop. The near month’s sharp rise after the exchange’s late-March notice is believed to have attracted selling pressure. The near month’s decline is likely to continue, with the time to drop below 210 yen for the next month seen as a matter of time.

（Tokyo Corn）
On the 18th, Tokyo corn rebounded on the back of rapid yen depreciation and delayed planting. May futures for the near month rose 150 yen to 21,440 yen.
Although Chicago opened lower during the night, the yen’s rapid depreciation made the Tokyo market seem oversold. The morning’s corn reaction was tepid, with the near-month starting at 21,180 yen. After 9 o’clock, helped by a small rebound in Chicago and the weaker yen, prices climbed into the 21,300 yen range, moving into positive territory. Considering the optimistic progress of planting and the weaker yen, levels below 21,200 yen could have been a short-term buying opportunity. By midday it extended toward the high 21,300s, but as the yen weakened again and Chicago’s gains narrowed, buying paused. Later, more solid buying pushed it back to around 21,400 yen by 1:30 p.m. Chicago’s gains were narrowing, but given it is early in the planting season, markets may not be worrying about planting delays yet.

（Tokyo U.S. Soybeans）
On the 18th, Tokyo soybeans were mixed. Near-month April futures were up 50 yen to 46,750 yen.
In the night session there was little movement, but during daytime trading it was mixed depending on the order flow. The newly resumed April futures recovered to around 47,000 yen, but with Chicago soybeans’ further decline after the market reopened, buying was closed out. There were some moves in the May contract’s backwardation, but there was no noticeable impact on the market.
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