Asian markets showed signs of sluggishness on Monday, primarily due to the impending Lunar New Year holiday which resulted in the closure of trading in several major cities, including Shanghai, Seoul, and Taipei. Both Hong Kong and Singapore also experienced reduced trading hours, closing early. Concurrently, US markets remained closed in observance of Presidents’ Day, adding to the quiet atmosphere in global trading for the day.

Adding to the cautious sentiment were Japan's latest economic growth figures, which revealed only a 0.1 percent expansion in the last quarter of 2025. This performance fell short of market expectations of 0.4 percent and has raised concerns about the sustainability of economic policies set forth by newly elected Prime Minister Sanae Takaichi. Her recent election victory on February 8 was founded on promises to invigorate Japan's economy, making these growth figures particularly troubling for her administration.

Economic analysts, such as Marcel Thieliant from Capital Economics, suggested that the weak growth could reflect the lack of impact from a supplementary budget that was passed at the end of the previous year. Thieliant posits that the stagnation in economic activity heightens the challenge for Takaichi, who must now find ways to reassure markets and implement effective policies that stimulate growth while addressing the underwhelming economic performance.