On a September morning in Kuala Lumpur, the ringgit quietly strengthened against the American dollar as traders began to weigh whether two of the world's great central banks, the Federal Reserve and the Bank of Japan, are preparing to tighten their grip on money. The shift reflects a familiar rhythm of global finance, in which a stronger economy in Japan and rising American bond yields reshape expectations far from Malaysian shores. Economists suggest that any American move may be a cautionary step rather than the start of a long campaign, a judgment that could change with the tides of conflic
Ringgit Opens Higher Against Dollar as Markets Weigh US and Japan Rate-Hike Bets
An insurance hike, not the start of a sustained tightening cycle
Mark
The ringgit only moved from 4.0605 to 4.0560. Why is that worth a story?
Mimi
It's a small move, but it shows what traders are watching: the Fed meeting on September 15-16 and a possible Bank of Japan hike on the 18th. The dollar softened, and the ringgit gained on it.
Mark
What is pointing to a Fed hike?
Mimi
Treasury yields. The three-month bill auctioned at 3.80 per cent and the six-month at 3.89 per cent, which Dr Mohd Afzanizam reads as a sign the Fed could raise rates.
Luke
Worth noting that's one economist's inference from auction yields. The Fed hasn't signalled anything in this reporting. A hike is an expectation, not a fact.
Mark
And Japan?
Mimi
GDP grew an annualised 1.4 per cent against a 1.1 per cent consensus, and July wages rose 4.7 per cent against 3.9 expected. Inflation was 1.9 per cent. He thinks that supports a 25 basis point hike.
Luke
Again, 'could.' The BOJ date and size are his forecast. The data points are reported; the decision isn't.
Mark
Stephen Innes calls the Fed move an insurance hike. What does that mean?
Mimi
That markets see it as a precaution, not the start of a long tightening cycle. He says it could be reversed once West Asia tensions ease and oil settles around the mid-US$80s.
Luke
That's a strategist's read of investor sentiment, and it depends on events nobody can confirm yet. Also, the ringgit was weaker against the yen, euro and pound, so 'stronger' only holds against the dollar and most regional peers.
Mimi
Right, it's a mixed picture, and the Singapore dollar was another one it lost ground against.
Il Polso
- The ringgit climbed to 4.0560 against the dollar at 8 am, easing from 4.0605 as the greenback lost ground.
- Traders are bracing for a possible Federal Reserve rate hike at the September 15-16 meeting.
- Japan's stronger GDP and wage numbers have pushed the yen to 153.53 and raised hopes of a 25 basis point BOJ hike on September 18.
- Strategists call a Fed move insurance rather than a sustained tightening, and that view could reverse if West Asia tensions ease and oil settles.
- The ringgit was broadly weaker against the yen, euro and pound, yet gained against most regional peers, except the Singapore dollar.
On a September morning in Kuala Lumpur, the ringgit quietly strengthened against the American dollar as traders began to weigh whether two of the world's great central banks, the Federal Reserve and the Bank of Japan, are preparing to tighten their grip on money. The shift reflects a familiar rhythm of global finance, in which a stronger economy in Japan and rising American bond yields reshape expectations far from Malaysian shores. Economists suggest that any American move may be a cautionary step rather than the start of a long campaign, a judgment that could change with the tides of conflict in West Asia and the price of oil.
At 8 am in Kuala Lumpur on September 9, the ringgit opened at 4.0560 against the US dollar, a little stronger than the previous close. The greenback had softened, and currency traders were turning over the same question: will the United States and Japan raise interest rates soon?
Dr Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia sees rising US Treasury yields as a sign that the Federal Reserve may lift its benchmark rate when it meets on September 15 and 16. Japan, he argues, is the other half of the picture. The yen firmed to 153.53 as Japan's second-quarter GDP grew faster than expected and wage growth reached 4.7 per cent, well above forecasts. With inflation near 1.9 per cent, he believes the Bank of Japan could raise its policy rate by 25 basis points on September 18.
Stephen Innes of Quintex Intel offers a calmer reading of the American side. In his view, markets see any Fed move as insurance against risk, not the start of a long tightening cycle, and it could be undone quickly if tensions in West Asia ease and oil returns to the mid-US$80s.
Against other currencies, the ringgit mostly slipped, though it gained on most regional peers, the exception being the Singapore dollar. Two dates now shape the outlook: the Fed decision on September 16 and the possible BOJ move on September 18.
At 8 am in Kuala Lumpur on September 9, the ringgit opened at 4.0560/0635 against the US dollar, a little stronger than yesterday's close of 4.0605/0640. The move came as the greenback weakened, while currency traders weighed the chances of interest rate hikes in both the United States and Japan.
Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, told Bernama that rising US Treasury yields point to the possibility of a higher benchmark rate from the Federal Reserve. The Federal Open Market Committee meets on September 15-16. In the latest Treasury auction, three-month bills yielded 3.80 per cent and six-month bills 3.89 per cent.
Japan was the second half of the story. The yen strengthened against the dollar to 153.53, which Mohd Afzanizam read as growing expectations that the Bank of Japan will raise its policy rate. He said the BOJ could lift it by 25 basis points on September 18, since the economy is growing well and inflation is rising; it stood at 1.9 per cent in July.
He pointed to two recent data releases. Japan's second-quarter 2026 gross domestic product grew at an annualised 1.4 per cent quarter-on-quarter, ahead of the 1.1 per cent consensus estimate. Wage growth among Japanese employees also accelerated to 4.7 per cent year-on-year in July, against market expectations of 3.9 per cent.
Stephen Innes, global strategist at Quintex Intel, offered a more cautious view of the US side. He said currency markets are treating an expected Fed move largely as an insurance hike, not the beginning of a sustained tightening cycle. In his reading, investors think it could be reversed fairly quickly once tensions in West Asia ease and oil settles back toward the mid-US$80s per barrel, a level that may increasingly be seen as the new normal.
Against other major currencies, the ringgit was mostly weaker. It slipped against the yen to 2.6437/6488 from 2.6374/6398 at Tuesday's close. It fell against the euro to 4.7167/7254 from 4.7151/7191, and eased against the British pound to 5.4934/5036 from 5.4926/4974.
Among regional currencies it mostly gained. It edged up against the Thai baht to 12.3241/3529 from 12.3285/3447, strengthened against the Philippine peso to 6.47/6.49 from 6.48/6.49, and rose against the Indonesian rupiah to 230.0/230.5 from 230.3/230.5. The exception was the Singapore dollar, against which the ringgit softened to 3.2081/2143 from 3.2073/2104.
Two dates now frame the market: the FOMC decision on September 16 and the possible BOJ move on September 18. Whether the Fed's step, if it comes, proves a brief insurance measure will depend on West Asia and oil prices.
Citazioni salienti
Currency markets are treating an expected Fed move largely as an insurance hike rather than the start of a sustained tightening cycle.— Stephen Innes, global strategist, Quintex Intel
The BOJ could raise its policy rate by 25 basis points on Sept 18 as the economy showed healthy growth alongside rising inflation.— Dr Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd
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Economy & Finance