Equities pushed higher across parts of Asia, with Japan notably strong, in a session shaped as much by currencies and headlines as by fundamentals. The clearest driver was FX: a weaker yen tends to act like a tailwind for Japanese stocks by boosting the value of overseas earnings and improving exporters’ competitiveness on paper.
But the rally came with a familiar 2026 qualifier—geopolitical risk. Traders are increasingly treating geopolitics as a permanent input, not a rare shock: it influences energy expectations, risk appetite, and where investors choose to hide when uncertainty spikes. That creates a market with two speeds: equities can rise on supportive currency and positioning flows, while the background anxiety keeps moves cautious and fast to reverse.
The takeaway: Japan’s strength underscored how powerful a currency move can be for local equity performance, while the broader region traded with one eye on the newsflow—because in today’s market, macro and geopolitics don’t take turns. They trade together.
