Asian markets opened mixed on Thursday, with most major indices trading in negative territory as investor sentiment remained cautious amid global economic headwinds. Currency indexes showed modest gains, but equity markets across the region faced selling pressure, led by losses in Japan, South Korea, and India.

Currency Strength Supports Region Amid Equities Weakness

The Japanese Yen Index opened stronger, gaining 0.66% to trade at 69.66, while the Australian Dollar Index also saw upward momentum, rising 0.43% to 65.30. The appreciation of these currencies reflects cautious investor sentiment and a flight to perceived safety as global uncertainty lingers.

Analysts note that the yen’s strength is often associated with risk-off sentiment, as investors seek safe-haven assets in times of economic volatility. Meanwhile, the Australian dollar’s gains are attributed to recent commodity support and slightly improved trade data.

Equity Markets Slide: Nikkei, KOSPI, Sensex Among Top Losers

Japan’s Nikkei 225 index was down 0.89%, dropping to 37,834.25 as investors reacted to a strengthening yen and signs of slowing industrial activity. Export-heavy Japanese stocks were under pressure, with tech and automotive sectors leading the losses.

In South Korea, the KOSPI Composite Index fell 0.87% to 2,894.62, weighed by weakness in semiconductor and technology shares. Market participants are closely monitoring the global chip cycle, which has shown signs of cooling after a strong start to the year.

India’s S&P BSE SENSEX also declined sharply, falling 0.71% to 81,109.78. The drop came amid renewed concerns over inflationary pressures and central bank rate policy. Indian banks and consumer-facing stocks led the retreat as investors reassessed growth expectations.

Chinese Markets Retreat as Recovery Concerns Persist

In mainland China, the benchmark Shanghai Composite Index (000001.SS) dipped 0.75%, opening at 3,377.00. The decline follows weaker-than-expected credit data and ongoing concerns over property sector debt levels, which continue to weigh heavily on market confidence.

Meanwhile, Hong Kong’s Hang Seng Index slipped 0.59% to 23,892.56, with real estate and tech sectors underperforming. Market watchers say capital outflows and cautious institutional sentiment are contributing to continued volatility in Hong Kong equities.

Australia Bucks the Trend with Modest Resilience

Australia’s S&P/ASX 200 [XJO] index showed relative resilience, posting a modest decline of just 0.21% to 8,547.40. Resource stocks held firm thanks to a rebound in commodity prices, particularly iron ore and copper. However, concerns over China’s slowing growth outlook continue to cap gains for Australian equities.

Local investors are also awaiting employment data due later this week, which may provide further insight into the Reserve Bank of Australia’s next policy moves.

Outlook: Caution Prevails as Investors Await Global Cues

Overall, the tone in Asian markets remains cautious as traders navigate a complex global macroeconomic environment. Concerns over U.S. interest rate paths, inflationary pressures, and geopolitical risks continue to influence market direction.

“Despite stronger currency performance, equity investors are showing signs of hesitation,” said a senior market strategist at Tokyo Securities. “Earnings season is approaching, and there’s a broad expectation of weaker forward guidance across key sectors.”

Investors will be closely watching upcoming economic data from the U.S. and Europe, including inflation figures and central bank commentary, which are likely to shape the next phase of market sentiment.