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Asia Markets Advance Despite Global Uncertainty

Asia-Pacific markets traded broadly higher, with investors largely brushing aside geopolitical tensions in Iran and Venezuela, as well as noise surrounding a criminal investigation involving U.S. Federal Reserve Chair Jerome Powell. Equity sentiment was supported by strong gains in Japan and optimism spilling over from record highs on Wall Street.

Japan led regional performance after markets reopened following a public holiday.

Nikkei Jumps on Political Developments

Japan’s Nikkei 225 surged 3.4%, marking its strongest single-day gain in weeks, while the broader Topix index climbed 2.13%. The rally was fueled by growing expectations that Prime Minister Fumio Kishida’s ruling Liberal Democratic Party will dissolve the Lower House later this month and call a snap election, potentially as early as February, according to reports from public broadcaster NHK.

Investors typically view snap elections as a path to political clarity, which can reduce policy uncertainty and support risk assets, particularly equities.

Heavyweights Power the Rally

Major index constituents drove the advance. SoftBank Group rose as much as 5%, while semiconductor related stocks surged sharply. Chip testing equipment maker Advantest jumped nearly 9%, and Tokyo Electron gained more than 8%, reflecting renewed optimism around global semiconductor demand and capital spending.

The strong performance in technology and chip linked names underscored Japan’s leverage to global growth and artificial intelligence investment trends.

Bonds Rise and Yen Weakens

Japanese government bond yields moved higher alongside equities. The 10-year JGB yield rose more than 5 basis points to 2.15%, while the 20-year yield climbed over 8 basis points to around 3.14%, signaling shifting expectations around growth and fiscal policy.

Meanwhile, the Japanese yen weakened slightly, touching a one-year low of around 158.25 per U.S. dollar, a move that typically benefits exporters but raises concerns about imported inflation.

Mixed Performance Across the Region

South Korea’s Kospi added 0.62%, supported by selective gains in large caps, while the tech heavy Kosdaq slipped 0.30%. Australia’s S&P/ASX 200 advanced 0.68%, tracking strength in global equities.

In China and Hong Kong, sentiment was more mixed. Hong Kong’s Hang Seng Index rose 1.25%, while mainland China’s CSI 300 opened flat. Shares of Chinese semiconductor firm GigaDevice Semiconductor surged nearly 50% in their Hong Kong trading debut after the company raised HK$4.68 billion, or about $600 million, in its initial public offering.

Oil Prices Edge Higher Amid Iran Tensions

Energy markets remained in focus as protests continued in Iran. U.S. President Donald Trump signaled a tougher stance, warning that countries doing business with Iran would face a 25% tariff on all trade with the United States, effective immediately.

Brent crude futures rose about 1.5% to $64.30 a barrel, while U.S. West Texas Intermediate gained roughly 0.4% to $59.76 per barrel in early Asian trading.

Wall Street Records Support Global Sentiment

U.S. equity futures were little changed during Asian hours as investors awaited fresh U.S. consumer inflation data and major bank earnings. Overnight, U.S. stocks rebounded from session lows to close at record levels.

The S&P 500 rose 0.16% to finish at 6,977.27, while the Dow Jones Industrial Average gained 0.17% to close at 49,590.20. The Nasdaq Composite added 0.26%, ending at 23,733.90. All three indexes reached new intraday or closing highs, providing a supportive backdrop for Asian markets.

Focus Turns to Politics and Data

With Japanese politics moving into sharper focus and global investors balancing growth optimism against geopolitical risks, markets are likely to remain sensitive to election developments, energy prices, and upcoming economic data releases in the days ahead.