The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

2141 ET - Malaysia's GDP is projected to grow 4.4% in 2025, with risks skewed to the downside from weaker global trade, tariffs, and geopolitical uncertainties, TA Securities economist Farid Burhanuddin says in a note. Growth momentum will increasingly rely on domestic policy support, with tourism expected to be a key catalyst from 2026, boosting services and private consumption, he says. Wage growth, investment realization, and income-supportive policies should underpin domestic demand, while the government's Budget 2026 in October will provide clearer guidance. TA Securities forecasts 2026 growth at 4.5%-5.0%. Bank Negara's policy rate is expected to remain at 2.75% through the year-end, it adds. (yingxian.wong@wsj.com)

2135 ET - The Japanese yen could underperform in the near-term, MUFG Bank's Michael Wan writes in a research report. Japanese Prime Minister Shigeru Ishiba announced on Sunday that he will step down. The leader taking over Ishiba will matter for policy direction, the senior currency analyst says. Sanae Takaichi, from the LDP's conservative wing, is seen as the most negative for JPY due to her support for loose monetary policy and stimulus. Agriculture Minister Shinjiro Koizumi is perceived as more of a reformist with an appeal to a younger generation, Wan says. The Bank of Japan may also delay its timing of rate hikes until it gains better clarity on the policy direction. USD/JPY is 0.6% higher at 148.31, LSEG data shows.(amanda.lee@wsj.com)

2111 ET - Japan's PM has thrown in the towel. Will markets really care? Not really, says Ortus Advisors' Andrew Jackson who publishes on Smartkarma, "seeing as he was one of the most disappointing wet fish PM's we have seen in a while--and that's saying something." But it could have implications for the bond market. Ishiba was seen as fiscally conservative. If the next PM is looser with the purse strings, markets may worry that the economy will become less stable, pushing JGB yields up and adding to Japan's enormous debt burden. Higher yields could see funds repatriate to Japan, boosting JPY. That would be a negative but a JGB exodus is likely to outweigh and have more of a negative impact on JPY, which is good for equities shorter-term, Jackson says. Nikkei is last up 1.7%. (fabiana.negrinochoa@wsj.com)

2057 ET - Malaysia's central bank may keep its key rate unchanged at 2.75% through 2025, though cuts cannot be ruled out if trade weakness deepens and GDP growth slips below Bank Negara's 4.0%-4.8% target range, CIMB economists Michelle Chia and Azri Azhar say in a note. Exports are expected to normalize in line with weaker global semiconductor sales, they warn. However, domestic demand, supported by steady wage growth, a firm labor market, and fiscal measures such as fuel price adjustments and cash handouts should remain the main growth driver, they say. BNM emphasized it is monitoring the effects of July's pre-emptive 25bp cut and noted that muted inflationary pressures into 2026 allow room for additional easing if needed, they note. (yingxian.wong@wsj.com)

2053 ET - Japan PM Ishiba's post-exit transition will be noisy, but expectations for big policy shifts are premature, says Stefan Angrick at Moody's Analytics. "Predictable punditry will cast moderates as prudent technocrats and conservatives as reckless spenders who will lean on the Bank of Japan to sustain cheap money forever," the economist says. But even party moderates who want tight spending must face voter frustration with inflation and the rise of right-wing populism, he says. Conservatives favoring bigger budgets need to accept that the economy needs more than demand stimulus. The view that a PM from that camp would prompt the BOJ to hold rates is simplistic. Extra fiscal support could boost demand and spur price pressure that would back a hike. "Whoever takes over will be walking a tightrope." (fabiana.negrinochoa@wsj.com)

2050 ET - The escalation in U.S.-India trade tensions will weigh on India's growth outlook, Deepali Bhargava of ING writes in a note. Asia is unlikely to fill India's export gap if trade with the U.S. falls, given India's shrinking regional trade, partly due to the India-Asean free trade agreement which was signed in 2010 but never took off, Bhargava writes. India is actively negotiating trade deals with Europe and other countries but will unlikely quickly fix the trade risks. Labour-intensive sectors like textiles, leather, and jewellery face the highest downside risks as they operate on thin margins and are highly price-sensitive, Bhargava says. These are also easily replaceable by countries like Vietnam and Bangladesh, which offer similar products at competitive prices, Bhargava adds. (kimberley.kao@wsj.com)

2046 ET - China's August CPI will likely be unchanged from a year earlier, repeating what happened in July, Moody's Analytics says in a note. China's consumer inflation came in flat at 0.0% on year in July and rose 0.4% on month. Soft income growth and uncertain job prospects are making households reluctant to spend, it says. Meanwhile, producer prices are expected to continue their long stretch of decline into August. Moody's expects a 3.5% on year fall in PPI as the economy struggles to shake off deflationary pressures. The inflation data are due on Wednesday. (monica.gupta@wsj.com)

2042 ET - India's GDP growth for the current fiscal year may fall below 6% if the 50% U.S. tariff rate persists, CareEdge Ratings writes in a note. The 50% tariff is one of the highest globally, eroding its competitiveness, even though India's direct goods export exposure to the U.S. is only around 2% of GDP, it writes. Negotiations may take time, as India remains cautious on sensitive sectors like agriculture and dairy, while risks of sectoral tariffs on pharmaceuticals and select electronics also remain, even though they are currently exempt, it adds. There could be a resolution in the coming months, but "the situation warrants close monitoring," it says. If tariffs are lowered, full-year GDP growth could reach 6.5%, it estimates. (kimberley.kao@wsj.com)

2037 ET - Japanese PM Ishiba's exit ushers in extended political uncertainty, say analysts at BMI, a unit of Fitch Solutions. Ishiba quit one day before his Liberal Democratic Party was to decide on an early leadership contest. Ordinarily, the next LDP leader would become PM but the opposition may band under a rival pick, or the LDP could offer the post to a new coalition partner to keep them in government. Frontrunners to succeed Ishiba are ex-economic security minister Takaichi and agriculture minister Koizumi, BMI says. Takaichi would be Japan's first female leader, while Koizumi would be the youngest post-World War II. Takaichi favors expansionary fiscal policy and has opposed rate hikes. Koizumi's economic policies are less clear-cut. Whoever's next faces the same legislative problem as Ishiba, unless a bigger coalition is formed. (fabiana.negrinochoa@wsj.com)

1836 ET - Investors are reacting positively to Investore Property's planned purchase of the Silverdale Centre in Auckland from Stride Property for NZ$114 million. Stride rises 1.6% to NZ$1.30 in early trading, while Investore gains 0.9% to NZ$1.16. Both stocks outperform the broader NZ-50 index, which is down 0.3% after half an hour of trading. For Investore, the deal appeals because the mall is located in a growing corner of New Zealand's biggest city. In its regulatory filing, the company says the Silverdale Centre catchment area is expected to grow to around 125,000 individuals in 2048. That represents growth of some 48% on 2023. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

September 07, 2025 21:41 ET (01:41 GMT)

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