Asian markets traded with a cautious but generally constructive tone on Thursday morning, December 4, as investors balanced improved currency stability against persistent macroeconomic uncertainties across the region. Sentiment was mixed, with gains in Japan offset by declines in China and South Korea, while the broader landscape remained influenced by shifting risk appetite and ongoing geopolitical considerations.

Japan Advances as Yen Steadies

Japan’s equities market outperformed in the early session, with the Nikkei 225 rising 0.70% to 50,212.09. Investors responded positively to signs of reduced volatility in the yen, reflected in a 0.44% increase in the Japanese Yen Index to 64.44. The improved currency backdrop bolstered exporter sentiment, particularly in the automotive and industrial machinery sectors, which have been sensitive to recent FX swings. The stabilization in yields also contributed to improved investor confidence, supporting the forward momentum of Japanese blue-chip names. Overall, Tokyo’s market continues to show resilience despite global uncertainties, with local earnings guidance maintaining an optimistic undertone.

Australia, India, and Hong Kong Show Mixed Tone

In Australia, the S&P/ASX 200 slipped 0.21% to 8,577.10 as miners and energy producers traded lower following subdued commodity pricing earlier in the week. However, the Australian Dollar Index showed a 0.52% increase to 65.99, signaling a strengthening currency even as equities softened. This divergence highlights ongoing pressure on export-heavy sectors, while domestic sectors such as banking remained largely stable.

India’s S&P BSE SENSEX inched down by 0.04% to 85,106.81, reflecting a relatively muted trading session as investors awaited further signals on monetary policy and inflation trajectory. Market participants have been cautious ahead of upcoming economic releases that could influence short-term positioning.

Meanwhile, Hong Kong’s Hang Seng Index traded flat at 25,760.73. The stability comes during a week marked by light regional catalysts and cautious trading among Chinese property and technology stocks. Although no significant movement was recorded, investors are monitoring policy signals from Beijing as fiscal priorities for the coming year begin to take shape.

China and South Korea Slip as Growth Concerns Persist

Chinese equities retreated, with the SSE Composite Index falling 0.51% to 3,878.00. The ongoing concerns around domestic demand, sluggish property-sector recovery, and uneven industrial momentum weighed on sentiment. Investors have been looking for stronger signals of coordinated stimulus, but fiscal caution continues to limit aggressive policy action, keeping the market on a restrained footing.

South Korea’s KOSPI shed 0.81% to 4,003.45, marking one of the weaker performances in the region. Semiconductor shares, which had recently enjoyed a strong rally, saw profit-taking as traders locked in gains. The broader decline also reflects external pressures tied to global technology demand cycles and geopolitical tensions that remain relevant for Korea’s export-heavy economy.

Regional Notes: Market Closure in Sri Lanka

Sri Lanka’s Colombo Stock Exchange remained closed today in observance of Unduwap Full Moon Poya Day. The regional holiday contributed to slightly lower cross-border trading activity in South Asia, though overall market impact was limited given the relatively modest international correlation of Sri Lankan equities.

What to Watch Next

As the trading day continues, investors will be monitoring currency developments, particularly whether the yen and Australian dollar can maintain their early-session strength. Regional markets may also take cues from upcoming economic data releases related to inflation, manufacturing activity, and trade flows. Key risks include ongoing geopolitical tensions, uneven recovery trends in China, and potential volatility in global bond yields. Opportunities could emerge in sectors tied to domestic resilience and technology, especially if policy signals turn more supportive in the days ahead.