The bond market also reacted to the political headlines. Yields on 10-year Japanese government bonds increased more than five basis points to 2.15%, and 20-year yields jumped over eight basis points to 3.137%. The moves came as the Japanese yen slipped to a one-year low of 158.25 per U.S. dollar.
Mixed performances across the region
Elsewhere in Asia-Pacific, equity benchmarks largely traded higher despite geopolitical concerns in the Middle East and South America, and notwithstanding news of a criminal investigation involving U.S. Federal Reserve Chair Jerome Powell.
- South Korea’s Kospi gained 0.62%, although the tech-heavy Kosdaq slipped 0.30%.
- Australia’s S&P/ASX 200 added 0.68%, buoyed by resources and banking shares.
- Hong Kong’s Hang Seng Index advanced 1.25%, while mainland China’s CSI 300 was little changed at the open.
A notable corporate highlight came from Chinese memory-chip designer GigaDevice Semiconductor. The firm’s shares surged nearly 50% in their Hong Kong debut after raising HK$4.68 billion (approximately US$600 million) at HK$162 per share.
Oil prices watch amid Iran unrest
Market participants remained attentive to energy prices as demonstrations in Iran continued for a seventh straight day. According to multiple reports, U.S. President Donald Trump is evaluating possible interventions. In a post on Truth Social, Trump warned that any country conducting business with Iran would face an immediate 25% tariff on goods entering the United States.
During Asian trading hours, benchmark crude contracts moved higher. Brent February futures were up 1.52% at US$64.30 a barrel, and West Texas Intermediate added 0.44% to US$59.76 at 7:34 a.m. Singapore time (6:34 p.m. Eastern Time Sunday). For additional context on recent price dynamics, the U.S. Energy Information Administration provides regular market updates (EIA).
Wall Street sets fresh records
Overnight in New York, U.S. stocks recovered from early weakness to close at new highs. The S&P 500 edged up 0.16% to 6,977.27, while the Dow Jones Industrial Average added 86.13 points, or 0.17%, to 49,590.20. The Nasdaq Composite rose 0.26% to 23,733.90. All three indexes registered both intraday and closing records.
U.S. equity futures were broadly unchanged in early Asian dealings, with investors awaiting December consumer price data and quarterly earnings from major banks later in the week.
Currency moves and policy backdrop
The softer yen reflected a wider pattern of dollar strength, as traders assessed the likelihood that a snap Japanese election could reinforce the current administration’s pro-business stance. A weaker currency typically boosts exporter profits, a key driver of the Nikkei’s composition.
Analysts also pointed to potential shifts in monetary policy expectations. Rising domestic bond yields suggest some investors are positioning for a gradual retreat from the Bank of Japan’s ultra-accommodative stance, although official guidance remains unchanged. Comprehensive information on Japan’s monetary framework is available from the Bank of Japan.
In South Korea, the won firmed slightly even as the Kosdaq dipped, with local traders monitoring corporate earnings and semiconductor demand trends. Australia’s dollar traded near a three-week high, supported by stronger iron-ore prices and solid consumer sentiment data.
Looking ahead
Market focus is expected to stay on political developments in Tokyo. A formal decision to dissolve the Lower House would set the campaign calendar in motion and could influence fiscal policy discussions, including plans for a supplementary budget.
Geopolitical events will continue to shape risk appetite, particularly any escalation in Iran or policy actions from Washington. In the near term, investors will likely gauge the impact of oil-price fluctuations on inflation and corporate margins across the region.
Crédito da imagem: Maydays | Moment | Getty Images
