Asian Markets Open Higher Amid Political Shifts and Global Trade Optimism

Asian markets started the trading day strong on Tuesday, with optimism spreading across the region. Japan’s Nikkei 225 initially surged to a new all-time high, crossing the 42,500 mark before retreating sharply to end in negative territory. The pullback came just hours after conservative lawmaker Sanae Takaichi was confirmed as Japan’s new prime minister — the country’s first female leader in its modern political history.

According to NHK, Takaichi secured 237 votes in Japan’s 465-member lower house, comfortably achieving a majority and ushering in a new era of leadership focused on defense, technology, and economic resilience. However, markets reacted cautiously, with some investors preferring to wait for clarity on her economic agenda.

Japanese Stocks Pull Back After Record Highs

Following an early surge, Japan’s Nikkei 225 erased its intraday gains to close slightly lower, ending a five-day winning streak. The Topix Index, which tracks a broader range of shares, also pared back earlier gains to close nearly flat after touching record highs earlier in the session.

The brief retreat reflected short-term uncertainty over Takaichi’s policy stance. Market analysts suggested investors were taking profits after the recent run-up, particularly as Japan’s benchmark index has already gained more than 35% year-to-date, driven by a weak yen and strong corporate earnings.

South Korea’s Rally Continues on Trade Deal Hopes

Meanwhile, South Korea’s Kospi Index climbed more than 2%, marking its sixth consecutive record close. The index is now up roughly 61% year-to-date, bolstered by strong export figures and optimism surrounding a potential trade deal with the United States.

U.S. Treasury Secretary Scott Bessent hinted in an exclusive interview that Washington and Seoul were “about to finish up” ongoing trade negotiations, suggesting an imminent breakthrough that could boost Korean exports and technology sectors.

Auto manufacturers led the rally, with Hyundai Motor soaring 6.45% and Kia Corp rising 4.28%, while tech giant Samsung Electronics added 1.73%.

Australia’s Rare Earth Stocks Surge on U.S. Partnership

Australia’s S&P/ASX 200 gained 0.50%, powered by a surge in rare earth and mining companies after a landmark agreement between Prime Minister Anthony Albanese and U.S. President Donald Trump. The deal, focusing on critical minerals, aims to reduce global dependence on China for rare earth supplies — a move seen as strategically significant for both countries.

Among major gainers:

• Lynas Rare Earths rose 3.8%
• Iluka Resources jumped 6%
• Pilbara Minerals climbed 4.7%
• VHM skyrocketed over 30%
• Northern Minerals advanced nearly 15%

The deal could reshape the rare earth supply chain and position Australia as a leading supplier to Western markets.

China and Hong Kong Stocks Show Modest Gains

Hong Kong’s Hang Seng Index climbed 1.17%, while the Hang Seng Tech Index advanced 1.84%, supported by strong corporate earnings. Mainland China’s CSI 300 added 0.3%.

Battery manufacturer CATL, a major supplier to Tesla, saw its Hong Kong-listed shares jump 4.73% after reporting a 41% increase in third-quarter profits, totaling 18.5 billion yuan ($2.6 billion). The performance highlights China’s ongoing dominance in the electric vehicle battery sector, despite global competition.

U.S. Markets Close Higher Ahead of Earnings and Inflation Data

In the U.S., equity futures were largely unchanged during Asian trading hours, following a strong overnight performance. The Dow Jones Industrial Average rose 515.97 points (1.12%) to 46,706.58, the S&P 500 climbed 1.07% to 6,735.13, and the Nasdaq Composite advanced 1.37% to 22,990.54.

The rally was led by Apple, whose shares surged after Loop Capital upgraded the company from “hold” to “buy,” reflecting renewed confidence in its product lineup and services growth.

Outlook

Despite political shifts and short-term volatility, Asia’s markets continue to show resilience, driven by strong corporate results, trade optimism, and evolving leadership. Japan’s historic appointment of Takaichi as prime minister marks a turning point — not only for politics but also for investor perception of stability and reform in the world’s third-largest economy.

With inflation data, corporate earnings, and trade developments shaping the global landscape, analysts expect continued momentum across Asia’s stock markets in the coming weeks.