Broader Asian markets were muted as a tech-fuelled rally in South Korea cooled

Japanese stocks led gains in Asia on Wednesday, racing to new highs on growing optimism over more fiscal stimulus from Tokyo.

Chinese stocks reversed early gains after Beijing altered a key margin financing policy to make it more difficult to buy shares on credit.

The move largely offset gains in chipmaking stocks and positive cues from upbeat December trade data.

Broader Asian markets were muted as a tech-fuelled rally in South Korea cooled.

Nikkei 225 climbed 1.6% to a record high of 54,522.0 points, while the TOPIX gained more than 1% to a high of 3,641.50 points. Both indexes extended sharp gains from the prior session.

Japanese stocks rallied as a host of reports suggested that Prime Minister Sanae Takaichi planned to dissolve parliament’s lower house and set the stage for a snap election as soon as early-February.

This notion pushed the yen to its weakest point in almost two years, which in turn benefited export-heavy Japanese stocks.

Shanghai Shenzhen CSI 300 and Shanghai Composite indexes dropped nearly 0.2% apiece, declining from multi-year highs after adding more than 1% earlier in the day.

Hang Seng index curbed gains to trade up 0.3%, amid continued strength in tech names.

Chinese shares reversed course after Beijing raised the minimum margin required for funding stock purchases in exchanges to 100%.

Shares advanced earlier in the day after data showed China’s trade surplus rose to a record $1.25 trillion in 2025. A sharp rise in December imports also drummed up hopes over a recovery in demand.

Chinese chip stocks also gained on the news, given that it marks more progress for Beijing’s complete self-reliance in AI.

Asian chipmaking stocks were also largely upbeat ahead of closely watched fourth-quarter earnings from TSMC, which is widely regarded as a bellwether for the sector.

TSMC will report its Q4 earnings on Thursday afternoon.

Broader Asian stocks moved in a flat-to-low range. KOSPI gained 0.3%, reversing mild intraday losses.

ASX 200 and Straits Times indexes were flat.