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New Straits Times
15 hours ago
- Business
- New Straits Times
US trade deals raise regional stakes
KUALA LUMPUR: The US' new tariff deals with Japan and the Philippines, could heighten regional competition, but economists say Malaysia still holds firm in key sectors. Malaysia should act swiftly to maintain its edge, they added. On July 22, US President Donald Trump announced a deal with Japan that set tariffs on the nation's imports at 15 per cent, including for autos - by far the biggest component of the trade deficit between the countries. A separate agreement with the Philippines set a 19 per cent rate, the same level as Indonesia agreed to and a percentage point below Vietnam's 20 per cent baseline level, signalling that the bulk of Southeast Asia is likely to get a similar rate. In return, Indonesia removed tariffs on over 99 per cent of US products in exchange, while Japan commits to open markets for US autos, rice and agricultural goods, and to invest US$550 billion into the US. "The US-Japan and US-Philippines deals suggest Washington is rewarding bilateral agreements with tariff relief. "That puts pressure on countries without deals, like Malaysia, to secure similar access or risk being sidelined for future export-led foreign direct investment," SPI Asset Management managing partner Stephen Innes told Business Times. However, Innes emphasised that Malaysia still remains a strong contender in the regional trade landscape. "While sectors such as automotive and final-stage electronics might see shifting investment flows, Malaysia's established role in the semiconductors and E&E supply chain remains a key asset. "Malaysia still offers strong fundamentals (particularly in electronics) but in this environment, trade certainty is a competitive edge. Bilateral talks with the US should now be a priority," he said. Echoing similar sentiments, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the risk of losing the nation's competitiveness is real. Therefore, product differentiation will be crucial for Malaysia to maintain its export strength. "Areas like Halal certification can help Malaysia carve a niche where our products and services remain highly sought after, despite the higher tariffs US consumers might have to pay," he said. On whether Malaysia could lose trade share to Japan or the Philippines in specific sectors like electronics and automotive, Afzanizam pointed out that Malaysia's position in the OSAT (outsourced semiconductor assembly and test) space is already strong. "Malaysia has established its footprint in the OSAT segment of electronics. Given our economies of scale, it may be quite difficult for other countries to replicate our capabilities," he said. Economist Dr Geoffrey Williams said the new tariff deals for Japan, Philippines and before this Indonesia and Vietnam, had put Malaysia at a disadvantage if the 25 per cent reciprocal tariff is maintained. "It will affect trade and FDI because companies will locate FDI to countries with lower US tariffs," he said. Williams said Malaysia's automotive exports are unlikely to be affected, but component manufacturing and certain E&E segments may see gradual changes in investor interest. "It may not affect semiconductors but could affect other electrical and electronics. It will not affect automotive because Malaysia does not export vehicles but it could affect components. "The lesson is clear, Malaysia must go zero-tariff and try to reduce non-tariff barriers to compete. There is only one week left," he said. From a positioning standpoint, Innes said with the Aug 1 tariff wall approaching fast, traders are conditioned to expect last-minute deals - headline-driven repricing that rewards speed over skepticism. "This one hits all the right spots including autos, agriculture, liquefied natural gas and even the promise of future investment. The US$550 billion figure Trump floated may be fuzzy, but the market does not care. "The trade tape was primed, and this was the spark," he added.
The Star
a day ago
- Business
- The Star
Ringgit extends gains as govt initiatives, US-Japan trade deal lift sentiment
KUALA LUMPUR: The ringgit extended its gains against the US dollar at Wednesday's close, lifted by the latest fiscal support measures announced by the government as foreign funds flocked into the local equity market, said an analyst. The local currency was also supported by optimism following the US-Japan trade deal which boosted Asian equity and foreign exchange markets across the board. At 6 pm, the ringgit rose to 4.2255/2300 versus the greenback compared with Tuesday's close of 4.2300/2370. Earlier today, Prime Minister Datuk Seri Anwar Ibrahim unveiled a new round of fiscal support measures aimed at alleviating living costs, stimulating domestic consumption and boosting household spending ahead of the upcoming National Day and Malaysia Day celebrations. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the one-off RM100 cash aid for Malaysians aged 18 and above, given through MyKad under the RM2 billion Sumbangan Asas Rahmah (SARA) programme, would help support economic growth in the second half of 2025. "In a way, it's like a mini fiscal stimulus at a time when external uncertainties have become apparent. Such proactive move bodes well for the ringgit in the near term,' he told Bernama. Meanwhile, SPI Asset Management managing partner Stephen Innes said the ringgit was supported by regional tailwinds after US President Donald Trump struck a "massive' trade deal with Japan on Tuesday, which included cutting US tariff on the latter to 15 per cent from 25 per cent. Innes noted that the deal has boosted market optimism which lifted stocks and Asian currencies including the ringgit. "There is growing speculation that if Japan could secure softer terms, Malaysia might also seek similar concessions before the Aug 1 deadline,' he added. However, the ringgit was weaker against a basket of other major currencies at the close. It slipped versus the Japanese yen to 2.8837/8870 from 2.8690/8739 at Tuesday's close, weakened vis-a-vis the British pound to 5.7230/7291 from 5.7088/7183 yesterday, and fell versus the euro to 4.9586/9639 from 4.9512/9594. The local note was also easier against some regional peers. It was flat against the Indonesian rupiah at 259.1/259.5 compared with 259.1/259.7 at yesterday's close. However, it slid vis-à-vis the Singapore dollar to 3.3071/3109 from 3.3011/3071 on Tuesday, depreciated versus the Thai baht to 13.1370/1567 from 13.0899/1172 previously, and inched down against the Philippine peso to 7.42/7.44 from 7.41/7.43. - Bernama
Barnama
a day ago
- Business
- Barnama
Ringgit Extends Gains As Govt Initiatives, US-Japan Trade Deal Lift Sentiment
WORLD By Fatin Umairah Abdul Hamid KUALA LUMPUR, July 23 (Bernama) -- The ringgit extended its gains against the US dollar at Wednesday's close, lifted by the latest fiscal support measures announced by the government as foreign funds flocked into the local equity market, said an analyst. The local currency was also supported by optimism following the US-Japan trade deal which boosted Asian equity and foreign exchange markets across the board. At 6 pm, the ringgit rose to 4.2255/2300 versus the greenback compared with Tuesday's close of 4.2300/2370. Earlier today, Prime Minister Datuk Seri Anwar Ibrahim unveiled a new round of fiscal support measures aimed at alleviating living costs, stimulating domestic consumption and boosting household spending ahead of the upcoming National Day and Malaysia Day celebrations. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the one-off RM100 cash aid for Malaysians aged 18 and above, given through MyKad under the RM2 billion Sumbangan Asas Rahmah (SARA) programme, would help support economic growth in the second half of 2025. 'In a way, it's like a mini fiscal stimulus at a time when external uncertainties have become apparent. Such proactive move bodes well for the ringgit in the near term,' he told Bernama. Meanwhile, SPI Asset Management managing partner Stephen Innes said the ringgit was supported by regional tailwinds after US President Donald Trump struck a 'massive' trade deal with Japan on Tuesday, which included cutting US tariff on the latter to 15 per cent from 25 per cent. Innes noted that the deal has boosted market optimism which lifted stocks and Asian currencies including the ringgit.
Barnama
a day ago
- Business
- Barnama
Ringgit Extends Gains To Close Higher Amid Japan Political Uncertainty
WORLD By Fatin Umairah Abdul Hamid KUALA LUMPUR, July 21 (Bernama) -- The ringgit extended its gains against the US dollar at Monday's close, as the greenback struggled to appreciate amid political uncertainties in Japan, said an analyst. At 6 pm, the ringgit rose to 4.2320/2365 against the greenback, compared to Friday's close of 4.2410/2455. SPI Asset Management managing partner Stephen Innes said the ringgit trended higher, supported by the election setback for Japan's Prime Minister Shigeru Ishiba's coalition, which did not trigger broader market volatility. 'The absence of contagion allowed Asian and other emerging market currencies, including the ringgit, to edge higher and strengthen modestly,' he told Bernama. Echoing Innes, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit traded firmer in tandem with a 0.13 per cent decline in the US Dollar Index to 98.268 points, as major currencies such as the euro, yen, and the British pound all appreciated against the greenback. 'Despite uncertainties surrounding Japanese politics, the US dollar is struggling to appreciate, yet this has not resulted in a weak Japanese yen,' he said. On that note, Mohd Afzanizam said the ringgit was generally firmer against the US dollar, with the pair hovering around RM4.2375 in the afternoon, compared to RM4.2493 during the morning session. At the close, the ringgit was traded mostly higher against a basket of major currencies.
Daily Express
2 days ago
- Business
- Daily Express
Ringgit strengthens against US dollar amid tariff deadline concerns
Published on: Wednesday, July 23, 2025 Published on: Wed, Jul 23, 2025 By: Bernama Text Size: At 8.03 am, the local currency strengthened to 4.2195/2375 against the greenback, up from Tuesday's close of 4.2300/2370. Kuala Lumpur: The ringgit opened firmer against the US dollar on Wednesday, supported by cautious optimism ahead of the looming Aug 1 tariff deadline. At 8.03 am, the local currency strengthened to 4.2195/2375 against the greenback, up from Tuesday's close of 4.2300/2370. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit is likely to trade between RM4.22 and RM4.24 today as markets remain wary of potential tariff impacts. 'Investors are adopting a guarded stance, waiting for clearer signals on trade policies,' he noted. SPI Asset Management managing partner Stephen Innes attributed the ringgit's early gains to shifting macroeconomic conditions. 'The US dollar is under pressure from falling Treasury yields and domestic political concerns, which is benefiting emerging market currencies like the ringgit,' he said. Innes added that the ringgit's rebound reflects more than just a temporary bounce. 'A softer dollar, renewed trade talks, and hopes for tariff relief are creating a favourable environment for the ringgit,' he told Bernama. He also highlighted ongoing negotiations between Malaysia and the US, where Malaysian officials are reportedly seeking a reduced tariff rate of 15–20 per cent, compared to the proposed 25 per cent. Against other major currencies, the ringgit showed mixed performance. It weakened against the Japanese yen to 2.8767/8891 from 2.8690/8739 and dipped versus the euro to 4.9528/9740 from 4.9512/9594. However, it edged higher against the British pound, rising to 5.7052/7295 from 5.7088/7183. Regionally, the ringgit strengthened against the Singapore dollar to 3.3001/3144 from 3.3011/3071 and appreciated against the Indonesian rupiah to 258.5/259.7 from 259.1/259.7. It also gained slightly against the Philippine peso to 7.39/7.43 from 7.41/7.43. However, it slipped against the Thai baht to 13.1138/1767 from 13.0899/1172. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
