【Fuji Tomi】 Tokyo Gold rebounds

（Tokyo crude oil and refined products）
On the 7th, Tokyo crude oil and refined products closed mixed. The front-month crude oil futures for November were up 110 yen at 34,120 yen, the front-month gasoline futures for December stayed unchanged at 46,590 yen, and the front-month kerosene futures for December were up 110 yen at 47,750 yen.
Overseas crude oil showed a technical rebound, and the Tokyo market also surged during the night session. There seemed to be anticipation for the U.S. API inventory report released later. In the API report, crude oil stocks fell by 4.62 million barrels from the previous week, but refined product stocks rose by a total of 5.9 million barrels, which caused the overseas oil market to drop after the release. In Tokyo, during the day session, gains were pared back. However, considering the stock draw, there were buy-the-dip and tentative buy signals, so the downside was limited. Tonight’s U.S. EIA inventory data will shed light on crude production and gasoline demand. Last week, WTI and Brent, which had rebounded due to higher production, were sharply sold off. Before the EIA release, there might be solid activity driven by speculation, but afterward, prices are likely to weaken. The drawdown in crude stocks could be a false signal. WTI fell below 48 dollars after about 3:00 p.m., and with the rainy season in view, Tokyo gasoline moved into negative territory. Crude prices also trimmed gains and posted a new morning low.

（Tokyo precious metals）
On the 7th, Tokyo gold rose in line with the surge in New York gold. The front-month gold for April was up 6 yen at 4,532 yen, and the front-month platinum for April was down 15 yen at 3,377 yen.
As a safe-haven asset, New York gold advanced to as high as 1,298.8 dollars. It approached 1,300 dollars, and given the important event on the 8th, reaching 1,300 dollars is a matter of time. However, there were also sharp pullbacks, and New York gold erased its gains during the day session, causing Tokyo gold to pare gains. New York gold is viewed as holding at around 1,290 dollars. Meanwhile, New York platinum also fell, keeping Tokyo platinum under pressure. In the near term, waiting for a dip in gold and a rebound in platinum would be prudent. However, before the weekend, gold purchases should be unwound, and traders might consider selling on a rally, depending on the congressional testimony of former FBI Director Comey.

（Tokyo Rubber）
On the 7th, Tokyo rubber fell sharply at times but was later bought back substantially, ending mixed. The front-month November contract closed 0.3 yen weaker at 185.5 yen.
In the night session, selling triggered further selling, pushing the front month below 180 yen. The morning sell-off continued, and the front month updated to new night-session lows, but quickly recovered above 180 yen. The front month held at around 190 yen, with sellers exhausted and sentiment turning cautious, keeping trading in the 180 yen zone. As the market showed signs of a pause in the broader decline, the front month briefly topped 185 yen before 3:00 p.m. The overall pattern suggests the night session might test higher levels.

（Tokyo Corn）
On the 7th, Tokyo corn rebounded amid hot and dry concerns. The front-month May contract rose 260 yen to 22,400 yen.
In Chicago, heat and drought concerns spread through the Corn Belt and Plains, driving a sharp rally, which supported Tokyo buying and a rebound. However, the Tokyo rise was modest relative to Chicago’s surge. From the end of last week into the early part of this week, maximum temperatures in the northern half of the Corn Belt and Plains exceeded 35°C. Later in the week, temperatures are expected to drop below 30°C, but another spell of 35°C+ is forecast for the coming weekend. In particular, the Plains’ spring wheat crop is deteriorating, which implies deterioration for corn as well. Large funds in the Chicago corn market remain heavily short, but the hot and dry conditions may be absorbed, making further downside acceptable. The near-month July contract in Chicago finally moved above the Ichimoku cloud, which should accelerate technical buying. Given Tokyo’s reluctance to rise strongly, buying on dips would be prudent. There is a possibility of breaking well above 22,500 yen.

（Tokyo U.S. soybeans）
On the 7th, Tokyo soybeans closed mixed after a sharp move upward in the front month. The front-month April contract rose 700 yen to 45,930 yen.
From the night session, front-month jumped sharply as traders bought the spread (the soybeans around the front month were bought). Chicago prices fell from their highs and the yen strengthened, but concerns over hot and dry in the U.S. Midwest encouraged buyers to hold back, contributing to the strong rally. The market may be overbought, and a correction could be expected, but with no sellers present, a steeper decline is unlikely. By 14:00, the high-price alert eased and the front month’s gain narrowed.
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