{"id":374952,"date":"2010-03-01T07:09:00","date_gmt":"2010-03-01T12:09:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/the-new-japanese-etfs-having-a-seismic-impact-on-the-commodities-market-2010-3"},"modified":"2010-03-01T07:09:00","modified_gmt":"2010-03-01T12:09:00","slug":"new-japanese-etfs-having-a-seismic-impact-on-the-commodities-market","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/374952","title":{"rendered":"New Japanese ETFs Having A Seismic Impact On The Commodities Market"},"content":{"rendered":"

There has been some unusual action on the Japanese commodities markets that demands a comment.<\/p>\n

I mentioned earlier this week that over the last two weeks the Japanese have revved up several new structured investment products tracking commodities.<\/p>\n

There are now some “seismic signals” registering in those markets, showing these new ETFs and trusts may be having an immediate impact.<\/p>\n

On Tuesday, open interest in rubber futures on the Tokyo Commodity Exchange suddenly jumped 12% (touching off a flurry of prophylactic jokes from some of my coarser Asian colleagues).<\/p>\n

\"chart\"<\/p>\n

This is a large jump. In fact, I can’t remember the last time I saw a daily move of this magnitude on a major commodities exchange.<\/p>\n

Most interestingly, the majority of the buying came from trade and broker members of the TOCOM. These professional buyers usually account for a very small portion of TOCOM buying. The bulk of purchases almost always comes from non-commercial customers.<\/p>\n

Trade and broker members are generally sophisticated buyers. The kind who would be dealing in the structured products TOCOM recently introduced. The big jump in rubber could be a direct result of these new investment options.<\/p>\n

And rubber wasn’t a one-off. Yesterday, open interest in TOCOM gold futures jumped 8%. Again, a large portion of the buying came from trade members.<\/p>\n

\"chart\"<\/p>\n

One surprise is that trading in TOCOM platinum and palladium futures has been relatively subdued, despite the launch of new PGM-backed ETFs last week.<\/p>\n

But there’s been action in other parts of the world. NYMEX palladium futures had a wild week. Last Friday, NYMEX open interest in palladium jumped 2.7%. On Monday, it fell back 2.6%. Only to jump 4.4% on Tuesday and then fall 5.5% yesterday. On near-record volumes.<\/p>\n

\"chart\"<\/p>\n

This is extreme volatility. And it may have to do with speculation that the new Japanese ETFs will increase global demand for platinum group metals.<\/p>\n

Something is certainly afoot. Keep an eye on this one.
Here’s to rubber, gold and palladium,<\/p>\n

Dave Forest
dforest@piercepoints.com<\/a>
www.piercepoints.com<\/a><\/p>\n

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