The ringgit opened stronger against the US dollar on Wednesday, supported by weakness in the greenback as markets assessed the outlook for interest rates in the United States and Japan.
At 8am, the ringgit rose to 4.0560/0635 against the US dollar, compared with Tuesday’s close of 4.0605/0640.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said higher US Treasury yields could signal that the Federal Reserve may opt for a higher benchmark interest rate when its Federal Open Market Committee (FOMC) meets on September 15 and 16.
“The US Treasury notes auction for three-month and six-month bills yielded higher at 3.80% and 3.89%, respectively,” he told Bernama.
Meanwhile, the Japanese yen strengthened against the US dollar to 153.53 yen, reflecting rising expectations that the Bank of Japan (BOJ) could increase its policy rate amid signs of stronger economic performance.
Mohd Afzanizam said the BOJ could raise its policy rate by 25 basis points on September 18, with Japan recording healthy economic growth alongside rising inflation, which stood at 1.9% in July.
Japan’s second-quarter 2026 gross domestic product grew at an annualised quarter-on-quarter rate of 1.4%, beating the market forecast of 1.1%.
Wage growth among Japanese employees also accelerated to 4.7% year-on-year in July, above market expectations of 3.9%.
Quintex Intel global strategist Stephen Innes said currency markets were treating an expected US rate increase largely as an “insurance hike” rather than the beginning of a prolonged tightening cycle.
He said investors expected the move could be reversed relatively quickly once tensions in West Asia ease and oil prices settle back towards the mid-US$80s per barrel, which could increasingly be viewed as the new normal.
Against other major currencies, the ringgit traded mostly lower.
It weakened against the Japanese yen to 2.6437/6488 from 2.6374/6398, slipped 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.
Against regional currencies, the ringgit was mostly firmer.
It strengthened against the Thai baht to 12.3241/3529 from 12.3285/3447, rose against the Philippine peso to 6.47/6.49 from 6.48/6.49, and gained against the Indonesian rupiah to 230.0/230.5 from 230.3/230.5.
However, the ringgit slipped against the Singapore dollar to 3.2081/2143 from 3.2073/2104.
