KUALA LUMPUR (July 29): Malaysian shares and the ringgit may take the cue today from the Bank of Japan's monetary-policy decision, which could influence Japanese equity and currency trades.

The Bank of Japan will announce its monetary policy following the conclusion of a two-day meeting today.

Japanese equities, which have an inverse correlation with the yen, are deemed a benchmark for Asian share markets. For Malaysia, the yen's strength may be closely watched against automotive companies, which have yen-denominated component imports besides businesses with yen-based debt.  

At 7:42am, the ringgit weakened to 3.8632 against the yen.

Besides the Bank of Japan, Malaysian shares had earlier responded to Fitch's move to downgrade Malaysia's ringgit-denominated debt. Yesterday, the FBM KLCI declined 5.06 points or 0.3% to close at 1,658.50 points.

US share trades will also be closely watched. Overnight, the Dow Jones Industrial Average fell 0.09%, S&P 500 climbed 0.16% while Nasdaq Composite rose 0.3%.

Reuters reported thaat U.S. stocks mostly rose on Thursday in anticipation of results from tech heavyweights Alphabet and Amazon, while the yen eased after Reuters reported the Bank of Japan was considering expanding monetary stimulus to address signs of weak inflation.

Expectations of further stimulus in Japan have dominated currency trading in recent weeks and overshadowed the U.S. central bank's policy-setting statement on Wednesday, when the Federal Reserve indicated it was in no rush to raise interest rates.