KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Bank of Japan (BOJ) Governor Kazuo Ueda reaffirmed that while the central bank is prepared to raise its key interest rate if data supports such a move, there will be no rush in doing so. In a speech delivered in Osaka on Tuesday, Ueda emphasized that the BOJ will take its time to carefully assess factors such as developments in financial and capital markets both domestically and internationally before making any further policy decisions. This signals little likelihood of a rate hike at the next BOJ meeting in October.
Ueda’s remarks echo his previous statements following the BOJ’s unanimous decision last Friday to keep the interest rate on hold. Ueda acknowledged the criticism the BOJ faced regarding its communication prior to the July rate hike, emphasizing a more careful and transparent approach moving forward.
Economists like Eiji Kitada of the Hamagin Research Institute noted that while Ueda signaled a future rate hike, it is not expected to happen soon. Ueda also suggested that the upside risk to prices is easing, largely due to the yen’s recent strength following a significant drop earlier this year. The yen's recovery has been supported by expectations that interest rate differentials between the US and Japan will narrow, especially after the US Federal Reserve began cutting rates.
Adding to the economic landscape is the upcoming Liberal Democratic Party leadership election, which will determine Japan's next prime minister. One of the key contenders, Sanae Takaichi, a strong advocate for monetary easing, called any rate hike "stupid" under current conditions. While the BOJ operates independently by law, Ueda acknowledged that government opposition to a rate hike could complicate policy decisions.
Many economists expect the BOJ to hold off on any further rate hikes until December or January, following two rate increases earlier this year. Ueda reiterated that a neutral policy rate, where the rate is neither stimulating nor restricting economic activity, would be appropriate if consumer price trends remain around the 2% target outlined in the BOJ’s quarterly economic report.
Comments
Post a Comment