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...
Inflation in Tokyo rose faster than expected in October, bolstering expectations that the Bank of Japan (BOJ) may continue its gradual path toward monetary policy normalization, while giving the yen a modest lift.
Inflation Surprises to the Upside
Core consumer prices, excluding fresh food, rose 2.8% year-on-year in October, beating the 2.6% median estimate and accelerating from 2.5% in September, data from Japan’s Ministry of Internal Affairs and Communications showed.
Core CPI (ex-fresh food): +2.8% YoY
Core-core CPI (ex-fresh food & energy): +2.8% YoY
Headline inflation: +2.8% YoY
The uptick was mainly driven by higher water charges after the end of city subsidies. Meanwhile, prices for energy and processed food edged lower.
The yen strengthened to 153.82 per dollar from 154.17 before the release, as traders priced in a slightly higher probability of a rate hike.
Policy Implications: Gradual Tightening Ahead
Although inflation in Tokyo often leads national trends, Governor Kazuo Ueda remains cautious. Analysts believe the BOJ will assess further data before committing to another rate hike.
“The BOJ is aware of risks that higher rates could slow growth, especially given the uncertainty from Trump’s trade tariffs,” said Taro Saito, head of economic research at NLI Research Institute. “They may wait until January before taking action.”
Bloomberg Economics noted that the stronger-than-expected Tokyo CPI supports the case for an earlier rate increase, as firms continue to raise prices for household goods and services.
Economic Data Roundup
Japan’s broader economic indicators painted a mixed picture:
Industrial production: +2.2% MoM in September (vs. +1.5% expected), +3.4% YoY
Retail sales: +0.3% MoM, +0.5% YoY (below inflation, implying weaker real consumption)
Jobless rate: 2.6% (steady)
Job-to-applicant ratio: 1.20 (unchanged)
While output growth exceeded expectations, consumption remains soft, suggesting households continue to feel the pinch of persistent price increases.
Political and Policy Backdrop
Prime Minister Sanae Takaichi unveiled plans to ease cost pressures through temporary measures such as gasoline tax cuts, lower electricity and gas prices, and grants to regional governments.
Despite inflation exceeding the BOJ’s 2% target for over three years, Japan’s leadership continues to back the central bank’s cautious approach.
Takaichi, known for her dovish stance, once remarked that it would be “stupid” to raise rates prematurely.
Investor Takeaway
The latest Tokyo inflation print reinforces the view that Japan’s disinflation narrative is fading, giving the BOJ room to gradually lift rates in the coming months.
While a December hike remains uncertain, the yen’s rebound and rising real yields suggest markets are positioning for a shift in Japan’s ultra-loose monetary stance sooner rather than later.
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