Key Points

• Asia-Pacific equities advance: China’s steady lending rates and Japan’s recent rate hike supported regional market momentum.
• China’s economic weakness persists: Sluggish retail sales, industrial output, and ongoing property declines increase pressure on policymakers.
• AI IPO boom in China: New technology stock listings soar, though foreign retail investors face access barriers.
• U.S. equity futures rise: A selective rebound in tech stocks is offset by valuation concerns and year-end uncertainty.

Asia Markets Advance as China Holds Rates, Japan Signals Policy Shift

Asia-Pacific equities traded higher as investors assessed China’s decision to keep key lending rates unchanged, reinforcing a cautious but supportive policy stance amid uneven growth. The People’s Bank of China held its one-year and five-year loan prime rates at 3% and 3.5% for a seventh straight meeting, in line with expectations, helping lift markets in Hong Kong, mainland China, and Australia. Japanese equities outperformed after the Bank of Japan’s recent rate increase to a three-decade high continued to be absorbed by markets, while South Korean stocks also posted solid gains. Regional sentiment was further supported by a rebound in U.S. technology shares, led by strength in Oracle following progress on a U.S. restructuring of TikTok, underscoring renewed confidence in select AI-linked names despite broader global policy uncertainty.

China Holds Lending Rates as Growth and Property Pressures Persist

China’s central bank kept its benchmark lending rates unchanged for a seventh consecutive month, underscoring policymakers’ cautious approach despite mounting evidence of economic softness. The People’s Bank of China held the one-year and five-year loan prime rates at 3% and 3.5%, even as November data showed retail sales and industrial production missing expectations and the prolonged property downturn deepening. Weak housing investment and falling home prices across major cities continue to weigh on confidence, while the muted response of the yuan highlights limited near-term relief from monetary policy alone. With growth momentum easing, attention is increasingly shifting toward prospective fiscal support and targeted stimulus measures as Beijing seeks to stabilize demand and defend its longer-term growth objectives.

China’s AI IPO Boom Surges, but Access Remains Limited for Foreign Investors

China’s artificial intelligence-linked equity market is seeing explosive debut performances, with domestic investors driving sharp gains in newly listed chipmakers such as MetaX Integrated Circuits and Moore Threads, underscoring strong local appetite for strategic technology assets. However, participation in mainland IPOs remains tightly restricted for overseas retail investors due to regulatory, residency, and account-opening barriers, leaving most foreign exposure indirect and delayed. While programs such as Stock Connect provide access to established A-shares, newly listed stocks are typically excluded for months, limiting timely participation. As a result, global investors largely rely on offshore funds or qualified institutional channels to gain partial exposure, even as China’s technology indices continue to outperform broader benchmarks, highlighting both the opportunity and structural constraints facing international capital.

U.S. Futures Edge Higher as Investors Weigh Tech Leadership Into Year-End

U.S. equity futures rose ahead of a holiday-shortened trading week, with investors assessing whether technology stocks can sustain their recent rebound into year-end. Futures on the S&P 500 and Nasdaq pointed modestly higher after a mixed week in which late gains in large-cap tech helped offset broader rotation, while the Dow lagged after a strong December run. Artificial intelligence-linked names showed renewed momentum, led by strength in Oracle following progress on a TikTok restructuring, alongside a recovery in Nvidia. However, investor sentiment remains cautious amid valuation concerns and uncertainty over a traditional year-end rally, with thinner liquidity and shortened trading hours likely to amplify selective moves rather than drive broad market direction.

Conclusion

Today’s market signals reflect a cautiously constructive backdrop shaped by policy restraint, selective risk appetite, and uneven global growth. In Asia, stable Chinese lending rates and Japan’s recent policy shift are supporting equities, even as weak consumption and persistent property stress highlight the limits of monetary tools alone. China’s booming AI listings underscore strong domestic confidence in strategic technologies, while structural barriers continue to constrain foreign participation. In the U.S., a tentative rebound in technology stocks is being balanced by valuation discipline and thin holiday liquidity. For investors, the environment favors selectivity, policy awareness, and measured positioning as markets transition toward year-end and early 2026 expectations.

Investment Insights

• Maintain a selective approach in Asia: Stable policy in China and a clear tightening signal from Japan support regional equities, but weak demand and property stress argue for targeted exposure rather than broad allocation.
• Differentiate within China’s technology theme: Strong performance in domestic AI listings highlights structural growth, yet access constraints mean international investors may be better positioned through offshore funds or established large-cap proxies.
• Watch policy-led catalysts over rate cuts: With monetary easing limited in China, fiscal measures and regulatory signals are likely to be more influential drivers of market direction.
• Remain disciplined on U.S. technology exposure: The rebound in AI-linked stocks shows resilience, but elevated valuations and low year-end liquidity favor careful position sizing and a focus on companies with clear earnings visibility.

Economic Calendar

Date	Event	Why It Matters
December 22, 2025	China PBoC Loan Prime Rate (1Y & 5Y)	Key signal for China credit conditions and the property cycle; influences regional risk sentiment and CNH.
December 23, 2025	U.S. GDP (Q3 estimate)	A major growth read that can shift rate expectations, Treasury yields and equity leadership into year-end.
December 23, 2025	U.S. Durable Goods Orders	High-frequency gauge of business investment and manufacturing demand; impacts cyclical stocks and yields.
December 23, 2025	U.S. Consumer Confidence (Conference Board)	Tracks household sentiment and spending appetite, a key driver for U.S. growth and consumer-linked sectors.
December 24, 2025	U.S. Initial Jobless Claims	Most timely labor-market signal; can move USD and rates as investors assess whether hiring is cooling.
December 24, 2025	U.S. Markets Close Early (Christmas Eve)	Reduced liquidity can amplify price swings and widen spreads, increasing volatility around data and headlines.
December 25, 2025	U.S. Markets Closed (Christmas Day)	Holiday closure shifts trading activity and positioning into adjacent sessions, often affecting volume and market depth.
December 26, 2025	Japan Retail Sales (Nov)	Key read on domestic demand as Japan adjusts to higher rates; can influence JPY and consumer-sector sentiment.
December 26, 2025	Japan Wholesale Sales (Nov)	Indicator of pipeline inflation and business conditions, relevant for BOJ expectations and yen sensitivity.