KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Japan's wholesale inflation accelerated for the fifth straight month in January, reaching 4.2%, further solidifying market expectations for a Bank of Japan (BOJ) rate hike in the near term.
📈 Key Inflation Figures & Market Impact
🔹 Wholesale inflation (CGPI) rose 4.2% y-o-y, exceeding the 4.0% market forecast and up from 3.9% in December.
🔹 Prices rose across key sectors, including food, textiles, plastics, and non-ferrous metals.
🔹 Yen-based import prices climbed 1.5%, reversing a 0.7% decline in December—highlighting the yen's continued weakness.
📌 Why It Matters: The BOJ is now under increased pressure to raise interest rates further to contain inflation.
💰 Market Reactions: Bond Yields & Currency Shifts
📌 The two-year Japanese government bond (JGB) yield surged to 0.805%, its highest level since October 2008.
📌 The yen weakened sharply, with the dollar jumping 1.29% to ¥154.44 overnight amid hot US inflation data and fading hopes for Federal Reserve rate cuts.
💬 BOJ Governor Kazuo Ueda: "Continued food price hikes could influence public inflation expectations, making price pressures more persistent."
🇯🇵 BOJ's Path to More Rate Hikes?
📌 The BOJ ended its decade-long stimulus program last year, raising short-term rates to 0.5% in January as inflation consistently exceeded its 2% target.
📌 Consumer inflation hit 3.0% in December, staying above the BOJ’s target for nearly three years.
📌 What BOJ Needs to See for More Hikes:
✔️ Broad-based wage growth to support consumption.
✔️ Sustained price hikes beyond goods, into services.
💬 Market Analysts: "While the BOJ focuses on consumer inflation, rising wholesale prices will inevitably push up costs for households, reinforcing the case for higher interest rates."
🔍 What’s Next?
✔️ BOJ’s next policy meeting to clarify its stance on further hikes.
✔️ Yen volatility may persist, especially with US inflation and Fed policy shifts.
✔️ Japan’s consumer inflation data for Q1 2025 will be a key determinant of BOJ action.
📌 With inflationary pressures mounting, markets are bracing for Japan’s first major interest rate hike cycle in years.
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