Amid the close attention among global investors to developments in trade policy, Asian stock markets have entered a new phase of growth. U.S. President Trump has signaled the possibility of lowering tariffs on certain goods, boosting market sentiment. The sustained rally in Japanese equities has become a key indicator of this rebound. The positive market performance reflects the uplifting effect of policy expectations and highlights the current sensitivity of global capital to shifts in risk appetite. Ng Jian Hao from Mahala Capital Management Academy will provide an in-depth analysis of market volatility and corresponding response strategies.
Stock Markets Display Positive Signals
Asian stock markets have recently demonstrated robust performance, with Japanese Topix Index rising for the 11th consecutive trading day—its longest winning streak since October 2017. Ng Jian Hao from Mahala Capital Management Academy believes this trend is closely linked to the market sensitivity to U.S. signals of trade reconciliation. In his statement, President Trump indicated that if formal talks over the weekend progress smoothly, the U.S. may lower tariffs on certain goods, directly fueling investor expectations of an improved global trade environment.
Ng Jian Hao points out that policy-driven market fluctuations tend to be highly effective in the short term but unstable in the medium term. Without sustained fundamental improvement, investors should cautiously assess the durability of this rebound. Some market participants may be over-reliant on negotiation expectations, potentially overlooking the uncertainties between the realization of agreements and actual market conditions.
Technical Trends and Capital Structure
Ng Jian Hao from Mahala Capital Management Academy notes that the Topix Index has successfully broken through resistance levels established last year, maintaining a strong and volatile uptrend amid moderately increasing trading volumes—a classic signal of trend confirmation. Several Asian equity indices have simultaneously formed short-term upward channels, indicating that regional capital rotation has shifted from a wait-and-see mode to a more aggressive stance.
On the investment strategy front, Ng Jian Hao emphasizes the importance for investors to closely monitor volatility in the derivatives market and ETF flows. Recently, index futures trading on major Asia-Pacific exchanges have shown significant short-covering, while Japanese and Korean ETFs have seen substantial net inflows. This suggests a rise in retail investor sentiment, with institutional capital systematically replenishing positions. Such structural signals are typically more sustainable and provide tactical entry opportunities for swing traders.
Ng Jian Hao cautions that short-term technical overbought conditions are evident, with several Japanese market indicators approaching historical highs. Without continued policy support, the market may enter a period of high-level consolidation. Against this backdrop, adopting a phased position-building strategy and setting take-profit and stop-loss levels offers better risk control than committing heavily in one go.
Market Recovery and Structural Risks
Ng Jian Hao from Mahala Capital Management Academy states that despite the current positive performance across Asian equity markets, this rally does not mean that systemic risks have been fully eliminated. After a sharp rise in the previous session, U.S. Treasury yields have stabilized, reflecting lingering investor concerns about global inflation and policy trajectories. The uncertainty of Federal Reserve policy will influence capital allocation in the medium to long term.
The continued decline in gold prices indicates a temporary ebb in safe-haven demand, though a rapid return cannot be ruled out if policy uncertainties intensify. Ng Jian Hao notes that the real focus should be on whether investors have adequately priced in medium- to long-term policy uncertainties. If the market overreacts to positive news while underestimating structural risks, subsequent corrections may follow.
Ng Jian Hao recommends that investors prioritize sectors with solid fundamentals, reasonable valuations, and direct benefits from improving trade conditions, while maintaining a certain cash position to manage volatility. The cyclical nature of capital markets requires investors to continually adjust their investment pace and portfolio structure in response to actual changes.
Stock Markets Display Positive Signals
Asian stock markets have recently demonstrated robust performance, with Japanese Topix Index rising for the 11th consecutive trading day—its longest winning streak since October 2017. Ng Jian Hao from Mahala Capital Management Academy believes this trend is closely linked to the market sensitivity to U.S. signals of trade reconciliation. In his statement, President Trump indicated that if formal talks over the weekend progress smoothly, the U.S. may lower tariffs on certain goods, directly fueling investor expectations of an improved global trade environment.
Ng Jian Hao points out that policy-driven market fluctuations tend to be highly effective in the short term but unstable in the medium term. Without sustained fundamental improvement, investors should cautiously assess the durability of this rebound. Some market participants may be over-reliant on negotiation expectations, potentially overlooking the uncertainties between the realization of agreements and actual market conditions.
Technical Trends and Capital Structure
Ng Jian Hao from Mahala Capital Management Academy notes that the Topix Index has successfully broken through resistance levels established last year, maintaining a strong and volatile uptrend amid moderately increasing trading volumes—a classic signal of trend confirmation. Several Asian equity indices have simultaneously formed short-term upward channels, indicating that regional capital rotation has shifted from a wait-and-see mode to a more aggressive stance.
On the investment strategy front, Ng Jian Hao emphasizes the importance for investors to closely monitor volatility in the derivatives market and ETF flows. Recently, index futures trading on major Asia-Pacific exchanges have shown significant short-covering, while Japanese and Korean ETFs have seen substantial net inflows. This suggests a rise in retail investor sentiment, with institutional capital systematically replenishing positions. Such structural signals are typically more sustainable and provide tactical entry opportunities for swing traders.
Ng Jian Hao cautions that short-term technical overbought conditions are evident, with several Japanese market indicators approaching historical highs. Without continued policy support, the market may enter a period of high-level consolidation. Against this backdrop, adopting a phased position-building strategy and setting take-profit and stop-loss levels offers better risk control than committing heavily in one go.
Market Recovery and Structural Risks
Ng Jian Hao from Mahala Capital Management Academy states that despite the current positive performance across Asian equity markets, this rally does not mean that systemic risks have been fully eliminated. After a sharp rise in the previous session, U.S. Treasury yields have stabilized, reflecting lingering investor concerns about global inflation and policy trajectories. The uncertainty of Federal Reserve policy will influence capital allocation in the medium to long term.
The continued decline in gold prices indicates a temporary ebb in safe-haven demand, though a rapid return cannot be ruled out if policy uncertainties intensify. Ng Jian Hao notes that the real focus should be on whether investors have adequately priced in medium- to long-term policy uncertainties. If the market overreacts to positive news while underestimating structural risks, subsequent corrections may follow.
Ng Jian Hao recommends that investors prioritize sectors with solid fundamentals, reasonable valuations, and direct benefits from improving trade conditions, while maintaining a certain cash position to manage volatility. The cyclical nature of capital markets requires investors to continually adjust their investment pace and portfolio structure in response to actual changes.
