Asian markets close mostly higher as gold hits fresh highs after Fed holds rates

Indices

As of January 29, 2026, the main Asian indices are demonstrating divergent trends, reflecting the influence of both geopolitical developments and shifting economic dynamics. The Nikkei 225 (N225) declined by 0.5%, closing at 53.06K points. This movement signals that Japanese equities, particularly exporters, are under pressure due to the appreciation of the yen and mounting geopolitical risks. Conversely, the Hang Seng Index (HSI) advanced by 2.4% to close at 27.78K points, indicating robust buying interest in China’s technology and financial sectors. The Shanghai Composite Index (SSEC) edged up by 0.5% to finish at 4.16K, suggesting cautious optimism as economic indicators stabilize.

Current buy signals are emerging for China’s technology and financial sectors due to their outperformance, while sell signals are pronounced for Japanese exporters affected by currency strength and trade headwinds.

Stocks

While specific most active, top gaining, or top losing stocks are not identified in the recent session, sector-level trends are evident. In Japan, stocks related to tourism and export are declining in response to China’s suspension of Japanese seafood imports and travel warnings, as well as the yen’s appreciation. In China, technology and financial equities are gaining, fueled by sector rotation into risk-on assets and supported by regulatory reforms enhancing market participation. These developments suggest a tactical focus on Chinese growth sectors and defensive positioning in Japanese export-reliant names.

Economic News

Diplomatic tensions between China and Japan have escalated following remarks by Japanese Prime Minister Sanae Takaichi regarding Taiwan. In response, China has suspended seafood imports from Japan and issued travel advisories, directly impacting Japanese tourism and related stocks. Additionally, both countries have introduced trade barriers—China delaying rare earth export approvals to Japan, and Japan imposing anti-dumping duties on Chinese goods—intensifying economic friction and increasing downside risk for sensitive sectors.

In China, the Securities Regulatory Commission has linked fund manager compensation to long-term investment performance and expanded futures and options access for foreign investors, reinforcing value investing and international participation. Japanese regulatory reforms have increased pressure on underperforming companies to improve capital efficiency, while retail investors are shifting away from cash due to inflation, supported by expanded investment options.

Economic Events

There are no specific upcoming economic or earnings events provided for either China or Japan at this time. However, the ongoing implementation of regulatory reforms and the evolving trade measures between China and Japan remain key macro drivers that could influence market volatility in the near term.

Market Sentiment

Sentiment across Asian markets is currently shaped by heightened caution, particularly within Japan, where the stronger yen and geopolitical anxieties weigh on investor confidence. Japanese investors are advised to monitor export-dependent sectors closely, as these remain vulnerable to both currency effects and trade restrictions. In China, despite political headwinds, the resilience of the Hang Seng Index and gains in technology and financial stocks indicate selective optimism and a moderate risk-on attitude. Nonetheless, the persistent threat of trade escalation tempers broader enthusiasm, suggesting that investors should stay vigilant and maintain flexibility in portfolio positioning.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.