Asian markets exhibited a subdued tone on Monday as the region prepared for the extended Lunar New Year holiday, which resulted in the closure of trading floors in mainland China, Seoul, and Taipei. Trading was also reduced in Hong Kong and Singapore, where markets operated on a half-day schedule. In the United States, stock markets remained closed in observance of Presidents’ Day.
The atmosphere in the markets was further influenced by disappointing economic data from Japan, where the economy displayed a mere 0.1% growth in the last quarter of 2025. This figure fell short of market expectations, which had anticipated a 0.4% increase, putting additional pressure on Prime Minister Sanae Takaichi. Her administration, following a decisive electoral victory on February 8, had pledged to stimulate economic growth. Analysts noted that the lackluster GDP growth suggested that a substantial supplementary budget approved at the end of November had not yet made a meaningful impact on public spending.
Marcel Thieliant from Capital Economics remarked that the slow economic activity may compel Takaichi to expedite plans for suspending the sales tax on food and potentially introduce a supplementary budget early in the new fiscal year, rather than waiting until the year’s end.
In early trading, Tokyo reported a slight decline of 0.03%, while other Asian cities like Wellington, Singapore, Jakarta, Bangkok, Manila, Kuala Lumpur, and Mumbai also recorded minimal losses. Conversely, Hong Kong saw a modest gain of 0.4%. After a tumultuous previous week characterized by a significant drop in tech stocks due to investor worries over substantial spending on artificial intelligence (AI) infrastructure, markets managed to stabilize.
Focus is now shifting towards the five-day AI Impact Summit that commenced in New Delhi, featuring prominent figures such as OpenAI’s CEO Sam Altman and Google’s Sundar Pichai. While the increasing interest in generative AI has resulted in surging profits for tech companies, concerns regarding its implications for society and the environment are becoming more pronounced.
Market sentiments were buoyed by recent U.S. government data indicating a slight cooling in consumer inflation for January. Analysts speculate that this trend might pave the way for the U.S. central bank to implement interest rate cuts later in the year, although they caution that sustained improvements are necessary for such decisions.
According to Kyle Rodda, a senior financial market analyst, the latest U.S. inflation data reflects a favorable trend, with both annual headline and core inflation reaching new lows. The core inflation rate dropped to its lowest level since March 2021, landing at 2.4%.
In commodities, gold prices crept past $5,000 an ounce, though they fell by 0.8% after a surge attributed to softer U.S. inflation data on Friday. Silver prices also decreased by 1.8%. A report from Standard Chartered indicated that a higher likelihood of significant rate cuts from the Federal Reserve has driven real yields lower, thereby stimulating gold demand.
Key market figures around 0330 GMT showed Tokyo’s Nikkei 225 down by 0.03%, while Hong Kong’s Hang Seng Index rose by 0.4%. The Shanghai Composite was closed for the holiday, and currencies such as the dollar against the yen and euro experienced minimal fluctuations. Oil prices for West Texas Intermediate and Brent North Sea Crude also noted slight declines.
In the U.S., the Dow Jones Industrial Average recorded a modest gain of 0.1% at its last close, and the FTSE 100 in London increased by 0.4%. As Asian markets navigate the upcoming holiday and mixed economic signals, investors remain vigilant about the evolving landscape.
