TradingKey - Japanese and South Korean stocks stage a dramatic turnaround to gain, with SoftBank surging over 2% and both SK Hynix and Kioxia reversing losses.

During the Asian trading session on August 25, Japanese and South Korean stock markets opened lower and extended losses early on, but bulls subsequently mounted a rebound, leading both markets to defy the trend and turn higher. Among them, the KOSPI Index dropped over 4% in early trading before ultimately closing up 0.68%, reclaiming the 6,700 level to settle at 6,742.74 points. Both major heavyweights turned around from early declines, with Samsung Electronics finishing flat to recover the 250,000 KRW mark at 257,000 KRW, and SK Hynix gaining 0.42% to reclaim the 1.6 million mark at 1,678,000 KRW.

KOSPI Index chart, source: TradingView

The Nikkei 225 Index dropped over 1.3% in early trading, falling below the 65,000 mark, but successfully turned positive in the afternoon, driven by a halt in semiconductor leaders' losses as well as gains in gaming and consumer stocks, closing near the day's high; it ultimately rose 0.5% to close at 65,856.38 points. Kioxia gained 0.65%, holding above the 50,000 mark to close at 51,260 JPY; SoftBank rose 2.25%, reclaiming the 5,000 level to close at 5,087 JPY.

After early-session panic subsided in Japanese and South Korean stock markets, fluctuations in the US Dollar Index and US Treasury yields moderated, easing capital outflow pressure from foreign investors in East Asian markets and providing a liquidity environment for Japanese and South Korean markets to catch a breath and rebound. After the midday session, bargain-hunting capital flooded in, led by rebounds in tech and export-oriented heavyweights, ultimately pushing both markets to turn strongly positive and close higher.

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