Overseas Markets Mixed – Sept. 25

NEW YORK – September 25, 2026 (STL.News) Overseas Markets – Overseas stock markets delivered a mixed performance Friday as investors balanced strength in Japanese equities and an improving start in Europe against a sharp global bond selloff, continued geopolitical uncertainty and another volatile move in crude oil prices.

Japan stood out among major Asian markets. The Nikkei 225 gained 850.21 points, or 1.30%, to close at 66,364.20, extending its winning streak to five consecutive sessions. The broader TOPIX rose 53.29 points, or 1.31%, to 4,128.59.

Hong Kong moved in the opposite direction. The Hang Seng Index fell 251.04 points to 24,510.09, down about 1.0%, marking its third straight decline.

Australia also finished lower. The S&P/ASX 200 fell 0.43% to 8,665.00, down from Thursday’s close of 8,702.00.

Trading activity across Asia was lighter than normal because several important regional markets were closed for holidays. Mainland Chinese, South Korean and Taiwanese markets were closed Friday.

The mixed equity performance came as investors confronted a potentially more significant development in global financial markets: sharply higher government bond yields.

Overseas Markets – Overseas Market Snapshot

The overnight numbers show a market that was neither broadly risk-on nor broadly risk-off. Instead, investors appeared to differentiate between individual markets while watching developments in bonds, energy and geopolitics.

Overseas Markets – Japan Rallies as Semiconductor Shares Advance

Overseas Markets: Japanese equities were among the strongest performers in overnight trading globally.

The Nikkei’s 1.30% advance was driven in part by semiconductor-related stocks after technology shares showed resilience in the United States.

Japanese banks and other financial shares also attracted buyers as longer-term interest rates remained elevated. Higher long-term rates can improve banks’ lending margins under some conditions, making financial companies potential beneficiaries of a higher-rate environment.

Another factor supporting Japanese shares was investor positioning ahead of the deadline to qualify for interim dividends.

The result was broad strength in Tokyo. Of the Tokyo Stock Exchange’s 33 industry groups, 31 finished higher, according to Japanese market data.

The Nikkei reached an intraday high of 66,410.27 before finishing at 66,364.20.

TOPIX reached an intraday high of 4,132.11 before closing at 4,128.59.

Japan’s equity rally was particularly notable because it occurred against an unsettled domestic bond market.

The benchmark Japanese 10-year government bond yield climbed as high as 3.115%, its highest level since August 1996, before retreating to finish around 3.070%.

The combination of rising stocks and unusually high government bond yields illustrates the competing forces currently affecting financial markets.

Overseas Markets – Global Bond Selloff Remains a Major Concern

Overseas Markets: The bond market remains one of the most important factors for investors heading into Friday’s U.S. trading session.

The yield on the benchmark U.S. 10-year Treasury moved above 5.20% during the latest bond selloff before easing to around 5.17% early Friday.

That placed the 10-year yield at levels not seen since 2007.

Bond yields move inversely to bond prices, meaning rising yields generally indicate falling government bond prices.

The increase matters far beyond Treasury investors.

U.S. government bond yields provide an important benchmark for borrowing costs throughout the economy. Higher Treasury yields can contribute to higher mortgage rates, corporate borrowing costs, and financing expenses.

They can also influence equity valuations.

When government securities provide higher yields, investors have an alternative to stocks that carries substantially less market risk. Higher interest rates also increase the discount rate used to value future corporate earnings, which can place particular pressure on highly valued growth companies.

Global bond markets have been responding to several overlapping concerns, including inflation risks tied to elevated energy prices, tighter monetary policy, and government borrowing requirements.

The pressure has not been limited to the United States. Japanese and European government bond yields have also risen substantially.

Overseas Markets – Oil Falls Below $100 After Another Volatile Session

Overseas Markets: Oil offered investors some relief Friday, although the size and speed of the move showed how volatile energy markets remain.

Brent crude had traded near $105 a barrel during the Asian session, but prices subsequently fell sharply as Friday trading progressed.

By early European trading, Brent had dropped below the psychologically important $100 level, trading around $98.50 per barrel.

The decline represented a significant reversal and helped improve sentiment in European equity markets.

Oil prices have become closely tied to developments surrounding the conflict involving the United States and Iran and the future of shipping through the Strait of Hormuz.

Investors are closely monitoring diplomatic efforts to establish a phased path toward reducing the conflict.

Negotiators have been exploring an arrangement that could include Iran reopening the Strait of Hormuz while the United States lifts its economic blockade of Iran.

The Strait is one of the world’s most strategically important energy transportation routes, so any progress toward reopening normal shipping conditions could significantly affect crude prices.

However, substantial geopolitical risks remain.

Continuing tensions involving Iran and attacks by Iran-backed Houthis have prevented markets from treating diplomatic developments as a definitive end to the crisis.

For financial markets, the decline in crude is nevertheless important.

Lower energy prices can reduce inflation pressures, potentially easing some of the forces pushing global government bond yields higher.

Overseas Markets – Hong Kong Falls for Third Consecutive Session

Overseas Markets: Hong Kong stocks finished lower as investors remained cautious about technology shares, global interest rates and relations between Washington and Beijing.

The Hang Seng closed at 24,510.09, down 251.04 points, or approximately 1.0%.

The decline marked the benchmark’s third straight losing session.

Investors were also watching Chinese President Xi Jinping’s visit to Washington and discussions with U.S. President Donald Trump.

Xi’s U.S. visit runs from Sept. 23 through Sept. 25.

The talks have placed several major issues affecting the world’s two largest economies back in focus, including trade, artificial intelligence and broader geopolitical disagreements.

Markets generally benefit from predictability in U.S.-China economic relations because both countries play central roles in global trade, manufacturing and financial markets.

However, investors had seen limited evidence of major breakthroughs on some of the most difficult issues as Friday’s overseas trading progressed.

Overseas Markets – Australia Extends Its Decline

Overseas Markets: Australia’s benchmark S&P/ASX 200 closed at 8,665.00, falling 37 points, or 0.43%.

The index fell to a low of 8,639.90 during the session after opening at 8,702.00.

Friday’s decline followed a 0.72% loss Thursday, when the index fell from 8,765.30 to 8,702.00.

The Australian market is particularly sensitive to developments in commodity prices, China and global interest rates because of the significant weighting of mining and financial companies in the country’s equity market.

Higher global borrowing costs remain an important consideration for Australian investors, while uncertainty surrounding China’s economic outlook can influence expectations for commodity demand.

Overseas Markets – European Stocks Open Higher

Overseas Markets: European markets provided a more positive signal as Friday trading began.

The pan-European STOXX 600 advanced approximately 0.6% to 640.43 during early trading, putting the benchmark on course for a weekly gain after three consecutive losing weeks.

Germany’s DAX was up about 0.65%.

Falling oil prices helped European sentiment because the region remains particularly sensitive to energy costs.

Energy shares declined approximately 0.7% as crude prices fell, while travel and leisure stocks advanced. Airlines were among the beneficiaries because lower fuel prices can reduce one of their largest operating expenses.

Ryanair and Lufthansa each gained more than 2% during early European trading.

The STOXX Europe travel and leisure index advanced approximately 1.2%.

European investors nevertheless continued monitoring government bond yields. Eurozone bond yields were heading toward a seventh consecutive weekly increase as investors assessed energy-driven inflation pressures and the possibility of tighter monetary policy.

Overseas Markets – Strong Dollar and High Yields Remain in Focus

Overseas Markets: Currency markets are another important part of the global picture.

Higher U.S. Treasury yields can support the dollar by making dollar-denominated fixed-income investments more attractive.

A strong dollar can create additional challenges for emerging-market economies, particularly those that import substantial quantities of commodities priced in U.S. currency.

Japan’s yen strengthened somewhat Friday, with the dollar trading around 158 yen, after recently approaching considerably weaker levels.

Currency movements remain particularly important in Japan because a weak yen can increase the cost of imported energy and other commodities while simultaneously helping some Japanese exporters by increasing the yen value of overseas earnings.

Overseas Markets – What the Overseas Session Means for U.S. Markets

Overseas Markets: The overseas trading session offers U.S. investors several competing signals ahead of Friday’s Wall Street open.

The strongest positive development is the decline in oil.

Brent’s move from about $105 during Asian trading to below $100 later Friday reduces immediate inflation concerns and could relieve pressure on global bond markets if the decline proves sustainable.

Japan’s 1.3% rally and the positive open in Europe also show continued demand for equities despite the sharp rise in government bond yields.

The principal source of concern remains the bond market.

A U.S. 10-year Treasury yield around 5.17% represents a dramatically different financial environment than investors faced when interest rates were substantially lower.

If Treasury yields continue climbing, higher borrowing costs could increasingly affect businesses, consumers and equity valuations.

Oil represents the second major variable.

Further declines in crude could ease inflation expectations and provide support for both bonds and equities. Renewed escalation involving Iran, the Strait of Hormuz or attacks elsewhere in the Middle East could quickly reverse the decline.

U.S.-China relations remain another issue investors will watch as the Trump-Xi meetings conclude.

Overseas Markets – Bottom Line

Overseas markets finished the latest Asian session with a decidedly mixed performance.

Japan’s Nikkei 225 rose 1.30% to 66,364.20. TOPIX gained 1.31% to 4,128.59. Hong Kong’s Hang Seng fell approximately 1.0% to 24,510.09. Australia’s ASX 200 declined 0.43% to 8,665.00. Mainland China, South Korea and Taiwan were closed for holidays.

Europe opened higher, with the STOXX 600 gaining approximately 0.6% during early trading.

Meanwhile, Brent crude dropped below $100 after trading near $105 earlier in the Asian session, demonstrating the extraordinary volatility that continues to characterize energy markets.

The overriding concern remains global interest rates. The U.S. 10-year Treasury yield moved above 5.20% before easing toward 5.17%, while Japan’s 10-year government bond yield briefly reached 3.115%, its highest level since 1996.

Heading toward Friday’s U.S. trading session, investors will be watching three markets particularly closely: Treasury bonds, crude oil and equities.

Oil prices and government bond yields could ultimately determine whether global stocks can maintain their recent resilience or face renewed pressure as September moves toward its conclusion.

Disclaimer: Market figures reflect verified closing levels for completed Asian sessions and early-session levels for Europe and commodities on Sept. 25, 2026. Intraday markets remain subject to change. This article is for informational purposes only and does not constitute investment advice.

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