East Asian equity markets opened Monday on a cautious but broadly stable footing, as investors balanced expectations of looser monetary policy later this year against persistent uncertainty around China’s growth outlook, regional earnings momentum, and global trade conditions. Early trading showed mixed performances across the region, with modest gains in Japan offset by softer sentiment in mainland China and Hong Kong.
Japan steadies after recent volatility
Tokyo stocks opened slightly higher, with the Nikkei 225 edging up in early trade. Export-oriented shares found support from a relatively weaker yen, which continues to underpin earnings expectations for manufacturers and technology groups. Automakers and industrials led early gains, while financials traded mixed as investors assessed the outlook for domestic interest rates.
Market participants remain cautious ahead of upcoming inflation data and guidance from the Bank of Japan, with expectations that any policy normalisation will proceed gradually. Trading volumes were moderate, reflecting a wait-and-see approach following recent global market swings.
Mainland China opens lower amid growth concerns
Mainland Chinese markets opened marginally lower on Monday, with the Shanghai Composite under mild pressure in early dealings. Investor sentiment remained fragile amid ongoing concerns over property sector stress, uneven consumer demand, and subdued private investment.
While authorities have reiterated their commitment to supporting growth through targeted stimulus and regulatory easing, markets appear unconvinced that near-term measures will be sufficient to generate a strong rebound. Defensive sectors, including utilities and consumer staples, outperformed, while property developers and cyclical stocks lagged.
Hong Kong slips as China-linked stocks weigh
Hong Kong equities also opened slightly weaker, with the Hang Seng Index declining in early trade. Technology and real estate shares were among the weakest performers, reflecting continued caution toward China-exposed assets.
However, losses were contained by selective buying in dividend-paying stocks and energy names, supported by relatively firm commodity prices. Investors remain focused on upcoming corporate earnings and any additional policy signals from Beijing that could stabilise sentiment.
South Korea and Taiwan trade mixed
Elsewhere in East Asia, markets in South Korea and Taiwan showed mixed openings. Technology stocks were uneven as investors reassessed global semiconductor demand following recent guidance from major chipmakers. While longer-term demand linked to artificial intelligence remains a structural positive, near-term pricing and inventory dynamics continue to influence daily trading.
Regional outlook remains data-dependent
Overall, East Asian markets began the week in a cautious mood, reflecting a complex mix of supportive global liquidity expectations and unresolved regional challenges. Investors are likely to remain highly sensitive to economic data releases from China, central bank commentary in Japan and the United States, and signals from corporate earnings over the coming weeks.
Until clearer confirmation emerges on growth and policy direction, analysts expect range-bound trading to persist across the region, with selective opportunities rather than broad-based rallies dominating the near-term outlook.
Newshub Editorial in Asia – 22 December 2025
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