Ringgit volatility rises as BOJ hogs limelight

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KUALA LUMPUR (July 31): Ringgit’s implied volatility climbs for a second day as investors brace for sharp swings in risk assets in the event the Bank of Japan hints at any reduction in stimulus at its policy announcement later Tuesday.

* USD/MYR 1-month implied volatility rises 0.14 vol to 5.77

* Spot USD/MYR is little changed at 4.0577

** Support 4.0413, 4.0170, 4.0083; resistance 4.0761, 4.0817, 4.0883

* Near-term resistance for pair seen at 4.0790 and 4.0840, though the 50- and 200-day moving averages have crossed which signals a fall back to 4.0180 first, says Angus Salim Amran, head of financial markets at RHB Investment Bank in Kuala Lumpur

** U.S.-China trade tensions pose a risk to the ringgit although it’s outperformed peers amid inflows into MYR bonds

* 10-year govt bond yield ended steady at 4.09% Monday

* Govt expects RM5b of dividends from sovereign wealth fund Khazanah and oil firm Petronas to help it achieve 2018 fiscal deficit target of 2.8% of GDP: Finance Minister Lim Guan Eng

* Cabinet has given in-principle approval for a rail project linking Johor Baru in the south with Singapore, according to a Malay Mail Online report citing Transport Minister Anthony Loke

* PM Mahathir Mohamad will be chairman of Khazanah; other directors include Economic Affairs Minister Azmin Ali, according to PM’s Office

* China’s Minister of Foreign Affairs Wang Yi to meet Mahathir Aug. 1: Malaysia’s foreign ministry