Malaysian assets could be under pressure if Fed, BoJ tighten
KUALA LUMPUR: Malaysian markets could face near-term pressure from the outflow of hot money in the short-term, if the US Federal Reserve and the Bank of Japan (BoJ) decide to raise their policy rates this week.
Malaysian markets could face short-term pressure if the US Federal Reserve and the Bank of Japan raise their policy rates, according to Malaysian sources. Risks include a weaker ringgit, higher bond yields, foreign equity outflows, and valuation pressure on rate-sensitive sectors like REITs, property, and high-growth technology stocks.
However, Malaysia's strong domestic growth, institutional support, defensive sectors, and AI-driven export demand may provide some cushion. The greater risk lies in the unwinding of yen-funded carry trades, particularly if the BOJ hike causes the yen to strengthen more rapidly than expected.
Brief written by urgent.news from New Straits Times's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
