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...
Rate Watch: Dovish Winds from Washington?
Dollar Hits 2-Year Low – A Bloomberg currency gauge fell 0.3% after Trump was reported to be considering an early Fed chair replacement.
Yields Slide Across Curve – 10-year Treasury yields dipped to 4.27%, reflecting renewed bets on rate cuts by September.
Fed Uncertainty Rises – Markets brace for a potential ‘shadow Fed chair’ who may pressure for looser monetary policy.
The US dollar slipped to its lowest level since April 2022 and bond yields dropped as markets repriced expectations for US rate cuts. The catalyst? Reports that President Donald Trump may name a replacement for Fed Chair Jerome Powell as early as September or October.
Such a move could rattle the current Fed consensus. Analysts say an early appointment might create a "shadow chair"—a politically-aligned figure with outsized market influence even before officially taking over.
“Trump has been vocal about wanting lower rates, so the market expects a dovish pick,” said Mahjabeen Zaman, head of FX at ANZ. “This is why we’re seeing pressure on the dollar.”
Treasury yields fell across the curve, with the 10-year yield down 2 basis points to 4.27%. Rate-sensitive tech stocks reacted favorably, pushing Nasdaq futures higher.
Meanwhile, equities across Asia posted mixed results. South Korea slipped after a strong rally, while Chinese stocks edged lower. Oil rose for a second day amid Middle East tensions and OPEC+ uncertainties.
The market is also digesting Fed commentary: Governors Waller and Bowman signaled they could support cuts as early as July if inflation stays soft. Powell, however, remains cautious, citing tariff-related unpredictability.
“The Fed’s pause is more about tariff risks than economic strength,” said Carol Schleif of BMO. “But if inflation stabilizes, we expect 1–2 cuts starting September.”
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