Japan and South Korea Stocks Open Higher and Gain as Japan Economic Data Signal Recovery

TradingKey - On Wednesday (March 18), Asia-Pacific markets delivered a strong performance in early trading, with Japanese and South Korean stocks opening higher; the Nikkei 225 Index rose 0.9%, and South Korea's KOSPI opened 2.2% higher.

Gains continued to widen thereafter. As of press time, the Nikkei 225 Index was up 1.52% for the day, while the KOSPI's gain further expanded to 3.75%.

In terms of individual stocks, SK Hynix rose by more than 3.6%, and Samsung Electronics climbed over 5%.

Meanwhile, the Japanese government bond market saw yields decline, with the 30-year JGB yield falling 2.5 basis points from the previous trading day to 3.525% and the 2-year yield dropping 1.5 basis points to 1.255%, reflecting market expectations that the Bank of Japan will maintain accommodative policy.

The latest trade data released by Japan's Ministry of Finance on Wednesday showed that Japan's total exports in February 2026 grew 4.2% year-on-year, the sixth consecutive month of growth and significantly higher than the market expectation of 1.6%, indicating that global demand remains a strong pillar for Japanese exports.

Influenced by both export growth and lower-than-expected import growth, Japan recorded a trade surplus of 57.3 billion yen (approximately $361 million) in February, compared with an earlier market forecast of a 483.2 billion yen trade deficit; the unexpected shift to a trade surplus has provided new momentum for Japan's economic recovery.

Japan's Cabinet Office had previously raised its fourth-quarter 2025 economic growth forecast to an annualized 1.3%, mainly due to strong corporate investment, showing that the Japanese economy has entered a phase of moderate recovery.

However, analysts warned that the recent surge in oil prices due to Middle East conflicts is exacerbating stagflation risks for the Japanese economy. As the world's fourth-largest economy, Japan is heavily reliant on energy imports, and rising oil prices could impact its economy.

Markets broadly expect the Bank of Japan to keep interest rates steady at the conclusion of its two-day monetary policy meeting on Thursday, while signaling a continued tightening bias to address inflationary pressures from a weak yen and rising oil prices.