KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
China has warned Japan of severe economic retaliation if Tokyo proceeds with further restrictions on the sales and servicing of chipmaking equipment to Chinese companies. This stance complicates ongoing US-led efforts to limit China's access to advanced technology. Senior Chinese officials have conveyed this message in recent meetings with their Japanese counterparts, according to people familiar with the matter.
Key Takeaways:
Potential Economic Retaliation: China's warning to Japan is seen as a direct response to US pressure on its allies to curtail technology transfers to Chinese firms. A specific concern for Japan, highlighted by Toyota Motor Corp., is that Beijing might restrict access to critical minerals essential for automotive production if Japan tightens chip-related exports. This mirrors past incidents, such as in 2010 when China temporarily halted rare earth exports to Japan after a territorial dispute.
Japan's Delicate Balancing Act: Japan faces a challenging decision in balancing its strategic alliance with the US and its economic interests with China. Some in Japan argue that Tokyo should not simply align with US demands but instead develop its independent strategy on export controls. Japan’s leading companies, like Tokyo Electron and Toyota, are heavily involved in the semiconductor sector, making this decision even more complex.
Escalating US-China Tensions: The US has been pushing its allies, including Japan and the Netherlands, to fully align with its semiconductor export controls to limit China's technological advancement, particularly in AI and high-bandwidth memory chips. The US is considering more restrictive measures, while some lawmakers have urged the administration to use all available leverage to gain allies' cooperation, including potential tariffs or additional export licensing requirements.
The ongoing negotiations are further complicated by the US presidential election and the upcoming resignation of Japanese Prime Minister Fumio Kishida. However, the Biden administration remains hopeful of reaching an agreement with Japan by the end of the year, potentially shaping the future of global semiconductor supply chains and tech alliances.
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