Asia-Pacific Markets Show Mixed Trends Amid Economic Data and Central Bank Decisions

Asia-Pacific markets saw mixed movements on Monday, with investors evaluating Japan’s fourth-quarter economic growth data while anticipating key central bank decisions later in the week.

In Japan, the Nikkei 225 hovered near the flatline, closing at 39,174.25, while the Topix saw a modest gain of 0.28%, finishing at 2,766.9. South Korea’s Kospi climbed 0.75% to end the day at 2,610.42, and the Kosdaq, which tracks smaller companies, surged by 1.61% to close at 768.48. Conversely, Australia’s S&P/ASX 200 saw a slight decline of 0.22%, ending at 8,537.1.

Japan’s economy showed strong performance in the fourth quarter, surpassing analysts’ expectations. Preliminary data revealed a 2.8% annualized GDP growth, well above the 1% forecast by Reuters. On a quarter-on-quarter basis, the economy grew 0.7%, also exceeding the anticipated 0.3% increase. Despite challenges, including a potential deceleration in private consumption, Japan’s growth was driven by improved business spending and a surprise increase in consumer demand.

The Japanese yen strengthened following the positive economic news, trading at ¥151.5 per US dollar. This has fueled speculation that Japan’s central bank, the Bank of Japan (BoJ), might raise interest rates further this year to combat persistent inflation.

Elsewhere in the region, China’s stock markets displayed some volatility. The Hang Seng Index in Hong Kong saw a slight decline of 0.15%, and the Hang Seng Tech Index, which tracks major tech stocks in the region, lost 0.38%. Tencent shares, however, saw significant gains, rising by 4.25% as the company began beta testing DeepSeek integration with its Weixin messaging app. This marked the highest point for Tencent’s stock since July 2021.

Meanwhile, Thailand’s stock market experienced a significant drop after the release of disappointing fourth-quarter GDP data. The country’s economy grew by just 3.2% year-on-year, missing the 3.9% expected by analysts, which contributed to a 1.86% drop in the SET Index.

As for upcoming developments, the Reserve Bank of Australia began a two-day meeting on Monday, with expectations that it may reduce interest rates by 0.25% on Tuesday. The Reserve Bank of New Zealand is also expected to announce its own policy decision on Wednesday, with markets predicting a 50-basis point rate cut.

With input from CNBC, the Financial Times, and Reuters.