Asia-Pacific Markets Slide Following Weak U.S. Session
Across Asia-Pacific stock markets on Monday, most benchmarks declined as investor sentiment stayed cautious after a volatile session on Wall Street. In Japan, the Nikkei 225 fell by about 0.3% after official data revealed a 1.8% annualised contraction in the country’s July-September GDP. The Hang Seng Index in Hong Kong also dipped by roughly 0.8%, as heightened China-Japan geopolitical tensions weighed on sentiment. Meanwhile, the KOSPI in South Korea showed modest strength, bolstered by gains in key tech-ranked names.
Key Drivers
The weak macro reading from Japan heightened concerns over the region’s growth outlook, especially given Japan’s heavy reliance on exports and external demand. At the same time, diplomatic strains between China and Japan exacerbated investor unease, particularly in equity sectors exposed to tourism, travel and cross-border trade flows. The U.S. markets’ weak finish continued to cast a shadow over Asian markets, with global risk appetite faltering in the absence of fresh positive catalysts.
What to Watch
Investors will keep a close eye on upcoming economic releases, including trade data from China and inflation figures in other major economies, to gauge whether the slowdown in Japan is an isolated dip or part of broader regional weakness. Any further escalation in geopolitical tensions, particularly involving China and Japan, may introduce additional volatility. The direction of U.S. interest-rate policy and the strength of the dollar will also remain important cross-regional monitors.
