KUALA LUMPUR: Bursa Malaysia’s key index, the FBM KLCI, closed 1.15 per cent higher at 1,665.90 on Friday, climbing to an almost 15-month high and surpassing the 1,660.09 points recorded on Sept 27, 2024, supported by firmer regional markets amid the Bank of Japan’s (BOJ) interest rate hike.
IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the BOJ’s policy move tempered discount-rate expectations and encouraged risk-taking across Asian markets.
He noted that divergent monetary policies across developed markets helped ease liquidity concerns in global funding markets, thereby boosting demand for emerging-market exposure.
"Divergent policies reduce fears of synchronised tightening, while yield differentials widen in selective regions, improving equity market relative carry attractiveness.
Mohd Sedek added that higher Japanese government bond yields could prompt Japanese investors to rebalance their global bond portfolios, indirectly supporting regional equity flows.
According to reports, the BOJ on Friday raised its benchmark interest rate by 25 basis points to 0.75 per cent, its highest level in three decades, and signalled openness to further hikes.
All nine members of the BOJ’s policy board, including Governor Kazuo Ueda, voted in favour of the hike at the conclusion of the central bank’s two-day monetary policy meeting.
It marked the first rate increase since January and the first under Prime Minister Sanae Takaichi’s administration.
Following the decision, the yen briefly weakened to the lower 156 range against the US dollar, while the yield on the benchmark 10-year Japanese government bond rose to 2.02 per cent, its highest level since August 1999.
At 5.55 pm, the ringgit stood at 2.5934/5964 against the Japanese yen. - Bernama
