Asian equity markets closed decisively higher on Monday, December 22, 2025, as investors embraced a renewed risk-on stance across both developed and emerging markets in the region. The coordinated advance reflected growing confidence that global growth risks are stabilizing and that major central banks may adopt a more measured approach in the first months of 2026. Strength in North Asia set the tone early, encouraging broad participation and reinforcing the sense that year-end positioning is shifting back toward equities.

Korea and Japan Drive Regional Performance

South Korea and Japan emerged as clear leaders in the regional rally, underscoring the importance of export-oriented economies when global sentiment turns constructive. South Korea’s KOSPI Composite Index surged 2.12% to 4,105.93, marking one of its strongest sessions in recent weeks. Semiconductor and electronics stocks led the advance, reflecting renewed optimism around global technology demand and easing concerns over supply chain disruptions. Investors rotated back into cyclical sectors after a period of consolidation, signaling confidence in earnings durability as 2026 approaches.

Japan’s Nikkei 225 rose 1.81% to 50,402.39, with gains reinforced by a sharp weakening in the Japanese yen. The softer currency enhanced the earnings outlook for exporters, driving buying interest in automakers, industrials, and technology companies. Beyond currency effects, the rally highlighted continued investor confidence in Japan’s corporate governance reforms, resilient balance sheets, and steady foreign capital inflows. Japan’s ability to combine equity strength with competitive currency dynamics remains a key pillar of its market appeal.

China and Hong Kong Extend a Measured Recovery

Markets in Greater China also advanced, though with a more measured tone that reflects lingering structural concerns. China’s SSE Composite Index gained 0.69% to 3,917.36 as investors responded positively to signals of policy support and improving liquidity conditions. Financials and infrastructure-linked stocks contributed to the upside, suggesting cautious optimism that domestic demand may be stabilizing after a challenging period.

Hong Kong’s Hang Seng Index added 0.43% to 25,801.77, supported by technology and consumer names. While investor selectivity remains high, the steady upward trend points to gradually improving confidence in China-linked assets. Market participants continue to monitor developments in the property sector and fiscal policy, but downside pressure has eased as policy expectations become more supportive.

India and Australia Participate as Confidence Broadens

Elsewhere in the region, India and Australia joined the rally, reinforcing the breadth of the advance. India’s S&P BSE Sensex climbed 0.70% to 85,523.27, driven by financials and industrials as investors maintained exposure to the country’s strong domestic growth narrative. Structural tailwinds such as infrastructure investment and consumption continue to underpin investor confidence despite periodic volatility.

Australia’s S&P/ASX 200 rose 0.91% to 8,699.90, with mining, energy, and banking stocks leading gains. Commodity-linked equities benefited from stable global demand expectations, while modest currency movements provided a neutral backdrop for exporters and domestically focused companies alike.

Forward View: Currency Signals and Policy Clarity in Focus

Looking ahead, Asian markets are likely to remain sensitive to currency trends, particularly movements in the Japanese yen, which continue to shape regional equity performance. Investors will also closely track policy signals from major central banks and upcoming economic data from China and the United States. With year-end positioning underway, short-term volatility may persist, but the latest rally suggests a more constructive regional backdrop as Asia transitions into 2026.