South Korea and Japan Equities Surge as Asia’s Risk Appetite Defies Global Jitters

If you blinked, you missed it: while the rest of the world spent the last week wringing its hands over hawkish Fed chatter and a dollar that looked ready to eat the euro’s lunch, Asian equities, specifically South Korea and Japan, just put on a masterclass in risk-on resilience. As of 2026-02-03 10:45 UTC, the iShares MSCI South Korea ETF (EWY) is holding steady at $120.915, refusing to budge even as volatility surges elsewhere. Japanese markets, meanwhile, are basking in a rally that feels almost contrarian, with local indices up sharply in the overnight session. The Strykr Pulse is humming at 65/100, signaling a market that’s not just surviving but actively thriving amid global macro crosscurrents.

So what’s driving this pocket of strength? For one, the Bank of Japan’s ironclad commitment to ultra-loose policy has become the stuff of legend. While the Fed and ECB play chicken with rate expectations, the BoJ is content to let the yen drift and the Nikkei rip. South Korea, for its part, is riding a tech export rebound that’s quietly outpacing even the most optimistic sell-side models. The headlines are full of noise about U.S. futures and precious metals, but the real story is unfolding in Seoul and Tokyo, where local investors are shrugging off global risk aversion and piling into equities with both hands.

This is not just a knee-jerk bounce. The move has legs, and the data backs it up. Japan’s consumer confidence is trending higher, and South Korea’s chipmakers are seeing order books swell as AI and data center demand goes parabolic. In a world obsessed with the next Fed move, Asian equities are quietly reminding everyone that fundamentals still matter.

While U.S. traders debate whether the S&P 500 can hold 7,000, the real rotation may already be underway. The dollar’s recent slide has only added fuel to the fire, making Asian assets more attractive on a relative basis. If you’re still waiting for a pullback to get long, you might be waiting a while.

The backdrop is not without its risks. Geopolitical tensions remain a wild card, and any hint of a policy misstep from the BoJ could send the yen soaring and equities reeling. But for now, the path of least resistance is higher.

Strykr Watch

Technically, EWY is locked in a tight range at $120.915, but the underlying momentum is unmistakable. The 50-day moving average is curling upward, and RSI is sitting comfortably in the mid-60s, bullish, but not yet overbought. The next upside target is the $124 zone, which marks the post-pandemic high. On the downside, $118 is the line in the sand; a break below that would invalidate the current setup and likely trigger a wave of stop-loss selling.

Japanese equities are even more stretched, with the Nikkei flirting with multi-decade highs. The 200-day moving average is a distant memory, and volume is running well above average as foreign funds rotate back into the region. Watch for potential exhaustion signals, but for now, the tape is clean.

The risk, as always, is that the rally becomes a victim of its own success. If positioning gets too crowded or macro data disappoints, the unwind could be swift. But with global investors still underweight Asia, the pain trade remains higher.

On the macro front, keep an eye on upcoming Japanese consumer confidence data and South Korean export figures. Any upside surprises could add fuel to the rally, while disappointments would be a reality check for the bulls.

As for correlations, Asian equities are increasingly decoupling from U.S. tech, a rare feat in today’s hyper-connected markets. That’s both an opportunity and a warning: when the music stops, liquidity can vanish in a hurry.

Geopolitics is the joker in the deck. Any escalation in the Taiwan Strait or Korean Peninsula would be an instant game-changer. For now, though, the market is content to look through the noise and focus on earnings and policy support.

The opportunity set is clear. Dip buyers are being rewarded, and momentum chasers are finally getting paid after a year of false starts. The risk is that everyone rushes for the exit at the same time if the narrative shifts.

Strykr Take

This is not your grandfather’s Asia rally. The combination of policy support, tech tailwinds, and global underweight positioning makes this a trade with staying power. The risks are real, but so is the upside. If you’re not at least market weight Asia, you’re missing the story of Q1 2026.