Asian equity markets closed Thursday, January 22, 2026, with a decisive rebound as investors rotated back into risk assets following several sessions of uneven and cautious trading. The recovery was led by Japan and South Korea, where export-driven sectors and technology stocks attracted renewed inflows. The session reinforced the view that the recent pullback was corrective rather than the start of a deeper reversal.

Broad participation across the region suggested that investors are regaining comfort with valuations and positioning, particularly in markets benefiting from favorable currency dynamics and resilient earnings expectations. While volatility has not fully receded, the return of coordinated buying marked a constructive shift in sentiment.

Japan Leads the Rally as Nikkei Posts a Strong Rebound

Japan’s Nikkei 225 jumped 1.73% to 53,688.89, delivering the strongest performance in the region. Exporters, industrials, and technology stocks led the advance as investors moved back into names that had been aggressively sold earlier in the week.

The rebound was supported by a 0.11% decline in the Japanese Yen Index, providing modest currency relief for overseas earnings. The move highlighted continued confidence in Japan’s corporate outlook and its leverage to global growth trends. Market participants viewed the recent weakness as an opportunity to rebuild exposure, particularly given improving earnings visibility and stable external demand.

South Korea and Australia Extend Gains as Risk Appetite Improves

South Korea’s KOSPI Composite Index rose 0.87% to 4,952.53, extending its leadership role in Asia’s early-2026 performance. Semiconductor and technology stocks once again underpinned gains, reflecting optimism around recovering global tech demand and strong corporate balance sheets.

Australia’s S&P/ASX 200 climbed 0.75% to 8,848.70, supported by strength in mining, energy, and select financial stocks. The Australian Dollar Index advanced 0.44%, reflecting improved risk sentiment and steady demand for commodity-linked currencies. Despite the firmer currency, equity performance indicated continued confidence in Australia’s growth and commodity outlook.

China, Hong Kong, and India Participate in the Broad-Based Recovery

China’s SSE Composite Index edged higher by 0.14% to 4,122.58, continuing its gradual stabilization trend. Financials and infrastructure-linked stocks provided support, while consumer sectors remained mixed. The modest gain reinforced the view that policy support continues to anchor mainland equities and limit downside volatility.

Hong Kong’s Hang Seng Index added 0.17% to 26,629.96, posting a cautious but positive close. Financial and technology stocks contributed modestly, signaling easing selling pressure in China-linked assets after recent swings.

India’s S&P BSE Sensex rose 0.51% to 82,327.74, rebounding after recent declines. Financials and consumer stocks led the recovery as investors selectively added exposure following heightened volatility. Despite short-term fluctuations, India’s domestic growth narrative continues to underpin longer-term confidence.

Outlook

Asian markets appear to be regaining momentum as investors reassess risk following recent consolidation. Attention will increasingly turn to corporate earnings updates, macroeconomic data, and guidance from major central banks to determine whether the rebound can be sustained. Currency movements—particularly in the yen and regional commodity-linked currencies—will remain key drivers of sector performance. While volatility may persist, the broad-based nature of Thursday’s rebound suggests underlying confidence remains intact, positioning Asian markets for selective upside as the first quarter of 2026 unfolds.