【Fujitomi】Tokyo Gold rises

（Tokyo crude oil and petroleum products）
Tokyo crude oil and petroleum products on the 5th briefly recovered into positive territory but were later sold off. The front-month crude oil futures for November were 2,300 yen lower than the previous week’s close at 34,760 yen, the front-month gasoline futures for December were 1,500 yen lower at 47,390 yen, and the front-month kerosene futures for December were 3,200 yen lower at 48,560 yen.
WTI surged in the early afternoon, jumping to $48.42. The reversal in the weaker NY petroleum product market provided a support, but after noon the strong WTI trend led and NY petroleum products rose as well. The rise after breaking through $48 likely reflected stop-loss buying. Given the dollar’s weakness, the market recovered from Friday’s lows, creating a chart with a somewhat long lower shadow in WTI, which could be considered a technical buy signal. Some observers also view the cut in ties between Saudi Arabia and Qatar as influential. However, when Saudi Arabia and Iran severed relations in the past, the crude market reaction was lackluster, so a strong excess reaction this time would be unusual. Since it was a rebound period, some bulls may have cited it as a factor to buy, but the current impact is unclear. Now, in this WTI strength, Tokyo reacted sensitively, and the crude oil futures during the day updated the night session high significantly, entering the 35,000 yen range and showing a return to positive territory. Tokyo markets have been holding off declines at the start of the week, and if there are bullish factors, the reaction could be somewhat overstated; nevertheless, the mood is to recover. As the day closed, yen- strength in FX and the narrowing gains in WTI reduced Tokyo’s bids, but prices did not fall enough.

（Tokyo precious metals）
Tokyo gold on the 5th rose sharply on expectations of further gains. The front-month gold futures for April were 26 yen higher at 4,535 yen, and the front-month platinum futures for April were 43 yen higher at 3,388 yen.
The bullish trend in Tokyo gold stood out, with buying confidence in the Tokyo gold market. Prices moved up from the morning and stayed near the day’s high, reinforcing the outlook for gains. On the 8th, U.S. FBI Director Comey’s congressional testimony and the UK general election were scheduled, providing risk factors that could support safe-haven buying, suggesting that gold may continue to be bought such as a hedge. Tokyo platinum also followed higher, but during the intraday trading hours it did not rise notably, showing a heavy uptrend. The market’s souring fundamentals did not change, and buyers shifted toward platinum as a hedge, which could be seen as price hedging. On the back of a weaker yen, Tokyo gold rose to the 4,540 yen area after around 14:00.

（Tokyo Rubber）
Tokyo rubber on the 5th declined sharply, mainly in the near-month contract. The front-month November contract was 2.5 yen lower than the previous week’s close at 191.5 yen.
The nearby month had been falling sharply for several days, creating pressure toward the front months. Domestic traders were buying on a near-term basis, keeping inventory tight. While near-term tightness was inevitable due to near-term buying, with the onset of the production season in producing areas, the risk of near-term buying diminished, leading to a sharp drop in near-month futures. Producers’ offers in the market have also been falling rapidly since June. The BS index has raised tire prices since June, and there was concern about weak demand in the summer, which also seemed to influence the sharp drop in the near-month and continued weakness into the front months. However, if the spread is corrected (backwardation), the potential downside for the front month may be limited going forward, so selling below 190 yen is likely to be restricted. Attention will now focus on the spread relationships.

（Tokyo Corn）
Tokyo corn on the 5th closed slightly lower. The front-month May contract was 30 yen lower at 22,320 yen.
Although Chicago showed solid movement from the weekend to the start of the week, the yen’s appreciation kept Tokyo in a softer tone. The early morning decline widened, but Chicago’s opening higher on Monday helped trim the losses, and the market recovered to around 22,300 yen. However, improving weather in the U.S. corn belt is seen as favorable for growing conditions, so buying remained cautious, resulting in a narrow trading range. The catalysts from Chicago at the start of the week are uncertain, so traders are waiting for the crop progress report due tomorrow morning. Still, with improving weather in the corn belt, the selling stance remains cautious.

（Tokyo U.S. soybeans）
Tokyo soybeans on the 5th rose. The front-month April contract was 300 yen higher at 45,700 yen.
Chicago soybeans surged on Friday on a weaker dollar, and then continued higher at the start of the week. This sentiment supported Tokyo front-month futures, but given the stronger yen, the rally may be excessive. A weaker dollar does not mean U.S. soybean demand is improving, so the sharp rise in Tokyo futures could present selling opportunities. The price spikes may be offered as a selling point as they rise further.
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