Asian markets began the week in positive territory on Monday, driven by strong gains in Japan and better-than-expected economic data from China. Investor optimism over political stability in Tokyo and improving industrial activity on the mainland helped set a constructive tone across the region.
Japan’s Nikkei rallies on political optimism
Japan’s Nikkei 225 led regional advances, climbing nearly 2.8% in early trade as investors welcomed speculation that Sanae Takaichi could become the country’s first female prime minister. Markets view her as supportive of pro-growth and stimulus-friendly policies, with potential for continued monetary accommodation from the Bank of Japan. Financial and technology stocks were among the strongest performers, reflecting renewed risk appetite.
China’s data offers a modest boost
In China, third-quarter GDP growth came in at around 1.1% compared to the previous quarter, slightly above forecasts, while annual growth reached approximately 4.8%. Industrial production rose 6.5% year-on-year, easing concerns about slowing factory output. The Shanghai Composite edged higher, and Hong Kong’s Hang Seng Index gained close to 2%, supported by renewed foreign inflows after several sessions of volatility.
Regional momentum and global cues
Elsewhere, South Korea’s Kospi and Australia’s ASX 200 also traded higher, tracking Wall Street’s steady close and improving sentiment toward risk assets. Expectations that the U.S. Federal Reserve could begin lowering rates in early 2026 provided additional support.
However, analysts cautioned that headwinds remain, including persistent weakness in China’s property market, soft consumer spending, and fragile export trends across emerging Asia. Despite Monday’s upbeat opening, many investors remain focused on whether recent policy assurances can translate into sustained recovery.
Outlook for the week
Market watchers will closely follow Japan’s political developments and a raft of upcoming economic indicators from China, including retail sales and new credit data. Any indication of fresh fiscal or monetary support could determine whether the current rally extends further into the week.
Newshub Editorial in Asia – 21 October 2025
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