Japan's Nikkei end Wednesday in the green, while China and South Korea closed for Lunar New Year

Indices

The Nikkei 225 (NIKKEI225) closed higher, up 0.93% to reach 57.09K. In contrast, the Hang Seng Index (HSI), Shanghai Composite Index (SSE), and KOSPI (KOSPI) remained closed for the Lunar New Year holiday, resulting in minimal regional trading activity. The Nikkei’s decline, following its record highs in January 2026, indicates mounting caution, with buy signals emerging selectively within the electronics sector.

Stocks

Within the Nikkei 225, trading was dominated by significant movements in both gainers and losers. Taiyo Yuden (6976.T) surged by 8.7 and Murata Manufacturing (6981.T) advanced by 6.9, both benefiting from robust demand for electronic components. This strength in components manufacturing suggests a potential opportunity for selective buying in the sector. Conversely, SoftBank Group (9984.T) declined by 5.4, joined by Japan Steel Works (5631.T) and NEC (6701.T), each falling sharply—reflecting sector-specific challenges and investor risk aversion. The inactivity of Hong Kong, Shanghai, and South Korean stocks due to holidays meant a lack of new catalysts in those markets.

Economic News

Japan reported annualized GDP growth of 0.2 in Q4 2025, falling short of expectations. This underperformance has heightened speculation about imminent government stimulus measures, which could support equities in the near term. The absence of major economic releases and trading activity in China and South Korea was due to extended Lunar New Year holidays, resulting in a quieter news environment.

Economic Events

No major economic releases were scheduled for Japan on February 17, 2026, while Chinese markets remained closed until February 23 for the Lunar New Year holiday. This lull has temporarily removed a key driver of regional market volatility, with investors likely awaiting post-holiday data and policy moves for fresh direction.

Market Sentiment

Overall sentiment in Asia has turned cautious, shaped by the Nikkei’s retreat after recent highs and the subdued trading landscape elsewhere. The combination of disappointing Japanese economic data and the absence of regional catalysts has fostered a wait-and-see approach among investors. However, selective optimism persists in the electronics sector, where strong demand continues to drive outperformance. For now, market participants are advised to monitor policy signals and upcoming economic data, especially as Chinese and South Korean markets prepare to reopen.

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