Asian markets opened with a mixed performance on Wednesday, reflecting political instability in Japan, cautious sentiment in China and Hong Kong, and diverging trends across India, South Korea and Australia. The session underscored how both local and global factors continue to shape investor confidence across the region.
Japan weighed down by political turbulence
In Tokyo, the Nikkei 225 opened lower as investors reacted to political uncertainty. Prime Minister Shigeru Ishiba is under mounting pressure to resign following his party’s electoral setback and the resignation of close ally Hiroshi Moriyama. The political turmoil added to concerns over the stability of Japan’s leadership and dampened sentiment among foreign and domestic investors.
China and Hong Kong face renewed selling pressure
Chinese equities began the day in negative territory, with the Shanghai Composite index falling close to 1% at the open. Investors remain concerned about the pace of economic recovery and persistent weaknesses in the property and manufacturing sectors. In Hong Kong, the Hang Seng slipped around 0.2%, continuing its run of subdued performance as global investors maintained a cautious stance.
South Korea shows resilience
The Kospi index in Seoul was among the few regional gainers, opening about 0.3% higher. Gains in major technology shares provided support, offering a contrast to declines elsewhere in Asia. Analysts suggested that selective buying by institutional investors was behind the uptick, signalling some confidence in South Korea’s export-led growth outlook.
Australia and India diverge
Australia’s ASX 200 dropped 1.1% in early trading, reflecting global risk aversion and pressure on commodity-linked shares. In India, trading opened with a mixed tone. Benchmarks such as the Sensex and Nifty were largely flat as investors awaited the outcome of a Goods and Services Tax Council meeting. The gathering is expected to provide clarity on fiscal measures, which could influence near-term market direction.
Currencies and commodities move in tandem with risk sentiment
In currency markets, the Indian rupee opened stronger against the US dollar, outperforming regional peers. Optimism around ongoing US–India trade discussions helped support the currency despite the cautious broader backdrop. In commodities, gold extended its recent rally, climbing to fresh highs as investors sought safe-haven assets amid ongoing equity weakness and volatility in bond markets.
Investor outlook remains cautious
The start of trading on Wednesday highlighted the uneven landscape facing Asian markets. While South Korea’s gains point to selective resilience, political pressures in Japan and weak sentiment in China continue to cloud the regional outlook. Rising gold prices reflect the scale of caution among global investors, who remain focused on both local policy shifts and wider macroeconomic risks.
REFH – Newshub, 3 September 2025
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