Asia Stocks Trade in Narrow Range as Japan Slides on Weak Q4 GDP
Most Asian stock markets moved within a tight range on Monday, as holiday closures in China kept trading volumes subdued. Japanese equities declined after disappointing fourth-quarter GDP data highlighted ongoing weakness in the country’s economy.
Markets in South Korea and Taiwan were also closed for the day, further reducing regional liquidity. U.S. markets remained shut for a holiday, while Wall Street had offered a soft lead following mixed January inflation data that did little to clarify the Federal Reserve’s interest rate outlook.
Japan’s Nikkei Falls After GDP Miss
Japan’s Nikkei 225 index slipped 0.2%, while the broader TOPIX index dropped 0.8% after official figures showed economic growth significantly undershot expectations in the fourth quarter.
Japan’s GDP expanded just 0.2% year-on-year, far below forecasts of 1.6%. The data also indicated only marginal improvement following a sharp contraction in the third quarter.
The weak reading was mainly driven by subdued business investment, sluggish export demand, and soft private consumption. Fiscal stimulus measures introduced in late 2025 provided limited support to growth.
However, broader losses in Japanese equities were capped by expectations that Prime Minister Sanae Takaichi could introduce additional fiscal measures to support the economy. At the same time, signs of slowing growth have reduced expectations for further interest rate hikes by the Bank of Japan, even though inflation remained elevated in the fourth quarter.
Hong Kong Shares Edge Higher
Hong Kong’s Hang Seng index rose 0.3% in thin trading conditions.
Metal producers CMOC Group and Laopu Gold were among the top gainers, climbing roughly 6% each after being added to the Hang Seng index following a recent review. Battery manufacturer Contemporary Amperex Technology also advanced 2.5% after its inclusion in the benchmark.
In contrast, auto retailer Zhongsheng Group Holdings declined 2% after being removed from the index.
Chinese mainland markets will remain closed for the entire week due to the Lunar New Year holiday, while Hong Kong will be shut from Tuesday through Thursday.
Mixed Performance Across the Region
Elsewhere in Asia, Australia’s ASX 200 gained 0.2%, while Singapore’s Straits Times index fell 0.1% after weaker-than-expected January non-oil export data.
Futures for India’s Nifty 50 index declined 0.4%, pointing to potential further losses. Indian equities have come under pressure amid rising concerns about artificial intelligence-related disruptions in the software sector, which weighed heavily on major tech stocks. The Nifty fell 1.3% on Friday due to tech-driven losses.
With several markets closed and economic uncertainty lingering, Asian equities are likely to remain sensitive to global growth signals and central bank policy expectations in the near term.
