Asian markets closed Thursday, January 29, 2026, with a generally positive tone as investors extended selective risk exposure following a strong multi-day rally across the region. Gains in North Asia continued to anchor sentiment, particularly in South Korea and Hong Kong, while China and India also finished modestly higher. Currency movements played a key role in shaping intraday positioning, with the yen retreating and the Australian dollar maintaining strength.

The session reflected a market transitioning from aggressive rebound mode into a more measured phase, where investors balanced recent gains against currency dynamics and holiday-thinned liquidity in parts of Asia.

South Korea and Hong Kong Extend Leadership in Regional Rally

South Korea remained the standout performer, with the KOSPI Composite Index rising 0.98% to 5,221.25, extending its leadership after a powerful advance earlier in the week. Technology and export-oriented stocks continued to attract inflows as confidence remained firm around global demand trends and Korea’s earnings outlook. The steady climb suggested that investors are still comfortable adding exposure, even as valuations move higher.

Hong Kong’s Hang Seng Index added 0.39% to 27,934.25, pushing further into recent highs. Financials and consumer-related names supported the move, while technology stocks remained mixed. The ability of the Hang Seng to hold gains following Wednesday’s sharp rally reinforced the view that China-linked equities are stabilizing after earlier volatility.

Japan’s Nikkei 225 edged up 0.03% to 53,375.60, effectively consolidating after recent advances. The muted move reflected a balance between stable equity demand and pressure from currency fluctuations, with investors appearing content to pause rather than aggressively reposition.

Currency Movements Create Divergence Across Markets

Currency performance was a defining feature of the session. The Japanese Yen Index fell 0.75% to 65.19, reversing part of its recent strength. The weaker yen provided modest support to Japanese exporters, helping the Nikkei avoid losses, but the overall equity response remained restrained as markets digested recent gains.

In contrast, the Australian Dollar Index rose 0.33% to 70.33, extending its recent strength and signaling sustained confidence in risk-linked and commodity-sensitive currencies. While a firmer Australian dollar can pressure exporters, it also reflects optimism around global growth and demand for raw materials.

China’s SSE Composite Index advanced 0.16% to 4,157.98, continuing its gradual upward trend. Gains were steady rather than aggressive, highlighting cautious optimism among domestic investors as policy expectations remain stable. India’s S&P BSE Sensex rose 0.28% to 82,578.14, rebounding modestly as financials and industrial stocks attracted selective buying after recent weakness.

Australia Softens Slightly as Malaysia Closes Early for Holiday

Australia’s S&P/ASX 200 slipped 0.07% to 8,927.50, underperforming regional peers. The mild decline appeared to reflect profit-taking following recent gains rather than a shift in broader sentiment. Strength in the Australian dollar suggested that underlying confidence remains intact despite the modest equity pullback.

In Southeast Asia, the Malaysia – Kuala Lumpur Stock Exchange closed early in observance of the Chinese New Year holiday. The early closure reduced trading activity and liquidity across the region but had minimal impact on overall market direction, as participation in Northeast Asia remained strong enough to sustain momentum.

Outlook: Consolidation Phase Emerges After Strong January Rally

Looking ahead, Asian markets may enter a period of consolidation as investors assess the durability of the recent rally. Currency trends, particularly movements in the yen and Australian dollar, will remain closely watched for signals on exporter margins and risk appetite. Earnings guidance, macroeconomic data, and policy developments in China and South Korea will be key catalysts for the next directional move. While holiday-related closures may continue to thin liquidity in parts of the region, the broader backdrop suggests Asia remains supported, with selective upside potential if global conditions stay stable and volatility remains contained.