Asian Markets Rise Ahead of Lunar New Year

Japan's economy grew slower than expected in Q4 2025, raising likelihood of stimulus measures

Published on Feb. 16, 2026

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Asian stock markets traded higher on Monday, with Japan's Nikkei 225 index edging up 0.1%, as several markets were closed or trading for a half-day ahead of Lunar New Year celebrations. Hong Kong's Hang Seng gained 0.5% in its half-day session. The sluggish 0.2% annualized growth rate in Japan's economy during the October-December quarter increases the likelihood that Prime Minister Sanae Takaichi will pursue stimulus measures to revive the economy.

Why it matters

The Lunar New Year holiday is a major event in Asia, and market movements ahead of the celebrations can provide insights into regional economic trends and investor sentiment. Japan's slower-than-expected economic growth also raises questions about the effectiveness of the government's policies and the potential need for further stimulus measures.

The details

Japan's Nikkei 225 index edged up 0.1% to 56,996.21, despite the government reporting weaker-than-expected economic growth in the latest quarter. Hong Kong's Hang Seng gained 0.5% in its half-day session, closing at 26,705.94. Stock markets in China, South Korea, and Taiwan were closed for the holiday. The S&P/ASX 200 in Australia picked up 0.3%, and India's Sensex was up 0.2%. U.S. futures also edged higher, with the S&P 500 and Dow Jones futures rising around 0.2%.

  • Japan's economy grew at an annualized rate of 0.2% in the October-December 2025 quarter.
  • The first day of the Lunar New Year falls on Tuesday, February 17, 2026.

The players

Sanae Takaichi

The Prime Minister of Japan, who is expected to pursue stimulus measures to revive the country's economy following the sluggish growth reported in the latest quarter.

Marcel Thieliant

The head of Asia Pacific at Capital Economics, who wrote a note analyzing the implications of Japan's slower-than-expected economic growth.

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What they’re saying

“The sluggish rate of growth increases the likelihood that Japanese Prime Minister Sanae Takaichi will press ahead with plans to revive the economy by raising government spending and cutting taxes.”

— Marcel Thieliant, Head of Asia Pacific, Capital Economics (sfgate.com)

The takeaway

The mixed performance of Asian markets ahead of the Lunar New Year celebrations highlights the region's economic diversity and the potential need for further stimulus measures in some countries, such as Japan, to support growth and investor confidence.