Asian equity markets rose on January 21, 2026, as investors responded to stronger-than-expected manufacturing data from China and easing geopolitical tensions in the Strait of Malacca. The benchmark CSI 300 index gained 1.7%, while Japan’s Nikkei 225 closed up 1.3%.
- CSI 300 Index rose 1.7% to 4,328.4 points
- Caixin Manufacturing PMI reached 51.9 in January 2026
- Nikkei 225 gained 1.3% to 38,675.1
- Tencent Holdings up 3.2%, LG Energy Solution up 4.1%
- Yuan strengthened 0.6% to 7.18 per USD
- Japanese 10-year yield rose to 1.22%
Asian equities opened on a positive note Tuesday, with major indices posting gains as global risk sentiment improved following better-than-forecast economic indicators from key regional economies. The CSI 300 Index in China surged 1.7% to 4,328.4 points, driven by a sharp rebound in factory activity as the Caixin Manufacturing PMI rose to 51.9 in January, signaling expansion after two consecutive months below 50. Similarly, Japan’s Nikkei 225 climbed 1.3% to close at 38,675.1, bolstered by a weaker yen and optimism around domestic demand recovery. The gains were broad-based across sectors, with tech stocks leading the rally. Tencent Holdings advanced 3.2% while ASML Holding NV shares rose 2.8% in Tokyo trading despite no direct exposure to the region, reflecting renewed confidence in semiconductor demand. In South Korea, the KOSPI Index posted a 1.5% increase, lifted by strong performance in battery and electronics manufacturers, including LG Energy Solution, which rose 4.1%. Currency movements also reflected shifting market dynamics. The Chinese yuan strengthened 0.6% against the dollar, reaching 7.18 per USD, while the Japanese yen weakened further to 152.4 per USD, marking its lowest level since late 2024. This shift has prompted regulatory scrutiny from the Bank of Japan, which is expected to review intervention options in the coming weeks. Investors remain cautious about near-term inflation pressures despite the upbeat data. CPI figures from China showed a 0.3% month-on-month rise, slightly above expectations, raising speculation about potential rate hikes later in the quarter. Meanwhile, bond yields in both China and Japan edged higher, with 10-year Chinese government bond yields rising to 2.68% and Japanese 10-year yields climbing to 1.22%.