KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
Bank of Japan (BOJ) Governor Kazuo Ueda said on Wednesday that it is "still taking time" to sustainably reach the central bank's 2% inflation target, signaling a cautious approach to raising Japan’s near-zero interest rates.
Speaking at a panel during the International Monetary Fund (IMF) meeting, Ueda acknowledged the potential risks of moving too slowly in adjusting rates, which could lead to a yen depreciation and higher import costs. However, he stressed that moving too fast could also result in speculative activity that could destabilize markets.
"When there's huge uncertainty, you usually want to proceed cautiously and gradually," Ueda said. But he added, "If you proceed very, very gradually and create expectations that rates will stay low for too long, you could see a build-up of speculative positions."
The BOJ has already begun to move away from negative rates, raising short-term rates to 0.25% in July, citing Japan's progress toward reaching the inflation goal. However, Ueda emphasized the need to closely monitor global uncertainties, such as the US economic outlook, before making further adjustments.
Despite underlying inflation showing some upward momentum, Ueda explained that it is still "taking time" to achieve 2% inflation sustainably, citing global energy and food price increases and rising wages as contributing factors. The central bank continues to maintain an easy policy to raise inflation expectations and drive Japan to a stable 2% inflation equilibrium.
The BOJ is expected to keep interest rates steady at its upcoming policy meeting next week, with most economists predicting a further rate hike by March of next year. Ueda remained cautious about future rate hikes, stating it is difficult to determine the right size and timing, saying, "We can't telegraph all our future movements."
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