Asian markets opened Thursday, January 8, with a mixed performance during the morning session, highlighting a growing divergence across the region. Strong gains in mainland China contrasted with declines in Japan and parts of South Asia, as investors selectively positioned ahead of key global macro signals and ongoing policy recalibration in major economies.

China and North Asia Drive Early Strength

Chinese equities emerged as the clear outperformers in early Asian trading, with the SSE Composite Index surging 2.95 percent to 4,085.77. The rally reflects renewed optimism around domestic policy support, liquidity conditions, and expectations that authorities may continue to stabilize growth through targeted fiscal and credit measures. Investor sentiment toward Chinese equities has been gradually improving after an extended period of underperformance, with domestic investors showing greater willingness to re-engage with large-cap and cyclical sectors.

South Korea’s KOSPI Composite Index also posted solid gains, rising 0.95 percent to 4,594.19. Technology and export-linked names provided support, benefiting from relative stability in global semiconductor demand expectations. Meanwhile, the Hang Seng Index in Hong Kong was flat at 26,458.95, suggesting a pause after recent volatility as investors assessed the sustainability of gains tied to mainland inflows and regional capital rotation.

Japan and South Asia Face Headwinds

In contrast, Japanese equities retreated during the morning session, with the Nikkei 225 falling 0.69 percent to 51,602.58. The pullback comes amid ongoing sensitivity to currency movements and speculation around future adjustments to Japan’s monetary policy framework. The Japanese Yen Index edged down 0.07 percent to 63.80, underscoring continued currency pressure that has supported exporters in recent months but also raised concerns about imported inflation and capital flows.

India’s S&P BSE SENSEX slipped 0.12 percent to 84,961.14, reflecting mild profit-taking following recent highs. Indian equities remain supported by structural growth narratives, but near-term valuation considerations and global risk sentiment are prompting a more measured approach among investors. The mixed performance across North and South Asia highlights the uneven pace of economic momentum and policy normalization across the region.

Australia and Currency Signals Reflect Caution

Australian markets showed limited movement, with the S&P/ASX 200 Index edging up 0.18 percent to 8,711.20. Gains were modest as investors weighed domestic economic data against global commodity price trends. Currency markets reinforced a cautious tone, with the Australian Dollar Index declining 0.23 percent to 67.23, suggesting some risk-off positioning amid uncertainty around global growth and interest rate trajectories.

Currency weakness across parts of Asia indicates that while equity investors are selectively adding exposure, there remains sensitivity to external factors such as U.S. monetary policy expectations and geopolitical developments. For globally oriented investors, currency dynamics continue to play a critical role in shaping relative returns across Asian assets.

What to Watch as the Asian Session Progresses

As the Asian trading day continues, investors will be closely monitoring whether China’s equity strength can be sustained beyond the morning session or if profit-taking emerges. Attention will also remain on Japanese markets for signs of stabilization, particularly in relation to yen movements and policy commentary. Broader risks include shifts in global bond yields, evolving expectations around central bank actions, and any geopolitical headlines that could influence risk appetite.

Opportunities may persist in selectively positioned Asian markets where policy support and earnings visibility align, but volatility is likely to remain elevated given cross-currents between growth optimism and macro uncertainty. For Israeli and global investors, Asia’s divergent performance underscores the importance of regional allocation discipline, currency awareness, and close monitoring of policy-driven market signals as 2026 unfolds.