Asian markets opened the first full trading week of the new year on a cautious note, with price action largely restrained during the Friday morning session. With several major exchanges closed for holidays and others operating with reduced participation, regional investors are beginning 2026 in a defensive posture, balancing optimism for the year ahead against persistent global uncertainties.

China and Greater China Markets: Marginal Gains Amid Holiday Absences

Mainland Chinese equities showed limited movement, with the SSE Composite Index inching up 0.09% to 3,968.84. The modest gain reflects cautious positioning rather than strong directional conviction, particularly as the Shenzhen Stock Exchange remains closed for New Year’s Day. The absence of Shenzhen-listed growth and technology names has reduced overall market depth, keeping volatility contained.

In Hong Kong, the Hang Seng Index was flat at 25,630.54, signaling a wait-and-see attitude among regional and international investors. With mainland participation lighter than usual and global investors still returning from year-end breaks, trading volumes remained subdued. Market participants continue to monitor China’s policy outlook, especially any early-year signals on stimulus, property sector support, or credit conditions that could shape sentiment in the weeks ahead.

Japan and North Asia: Quiet Session with Tokyo Closed

Japanese markets were closed as the Tokyo Stock Exchange observes a holiday period, removing one of Asia’s most influential liquidity centers from the regional equation. Despite the Nikkei 225 last trading at 50,339.48, down 0.37% prior to the holiday, investors are holding off on fresh positioning until Tokyo reopens.

Elsewhere in North Asia, South Korea’s KOSPI Composite Index was unchanged at 4,214.17, reflecting a balance between export-related optimism and concerns around global demand conditions. The lack of movement underscores the broader regional tone, where investors are reluctant to take aggressive positions in the absence of clear macro or policy catalysts.

Australia, India, and Regional Currencies: Diverging Signals

Australia’s S&P/ASX 200 edged higher by 0.03% to 8,716.90, supported by stability in resource stocks and defensive sectors. However, the Australian Dollar Index fell 0.37% to 66.70, suggesting ongoing sensitivity to global interest rate expectations and commodity price fluctuations.

In India, the S&P BSE SENSEX slipped 0.04% to 85,188.60, marking a mild pullback after recent strength. Indian equities remain among the stronger performers in the region structurally, but short-term consolidation is emerging as investors reassess valuations and global risk appetite.

Currency markets added another layer of caution, with the Japanese Yen Index down 0.14% to 63.86. The yen’s softness highlights continued divergence in monetary policy expectations, even as Japan’s equity market remains temporarily closed. Elsewhere in the region, the absence of trading in Kazakhstan, where the Kazakhstan Stock Exchange is closed for New Year’s Day, and Thailand, which is observing a special holiday, further reduced overall regional activity.

Outlook: What Asian Investors Are Watching Next

Looking ahead, Asian markets are likely to gain clearer direction once full regional participation resumes and liquidity normalizes. Investors will be closely watching China for any early-year policy guidance, Japan’s reopening for signals on equity momentum and currency trends, and global developments around inflation, interest rates, and geopolitical risks. While the subdued start to the year reflects caution rather than stress, opportunities may emerge as clarity improves and capital reallocates across equities, currencies, and sectors in the weeks ahead.