EWJ and EWY Rise as North Asia Gains

For Japan, the backdrop is constructive. EWJ is trading above both its 50-day and 200-day moving averages, and the longer-term trend remains intact despite a mild pullback from the September high. That keeps the focus on whether yen weakness, earnings resilience and continued corporate governance reform can keep Japanese equities attractive relative to U.S. peers. The recent easing in momentum, with RSI readings around neutral levels and the MACD narrowing, argues the market may be consolidating rather than breaking down.

South Korea’s market has been more volatile, but the larger trend is still positive. EWY trades well above its 200-day moving average, reflecting a powerful rebound from the spring rout and a recovery in investor confidence around semiconductors, exporters and cyclical names. Still, the ETF’s sharp swings in July and August show how sensitive Korean shares remain to global risk sentiment and any wobble in technology demand. That makes recent gains more meaningful: they imply investors are willing to look through volatility and position for a firmer earnings backdrop.

The broader market message is that Asia remains a relative beneficiary when investors rotate toward regions with leverage to global trade and manufacturing. That is particularly relevant as the S&P 500 trade-signal snapshot sits at neutral sentiment but extreme awareness, signalling crowded attention without a clear directional consensus in U.S. equities. By contrast, North Asian stocks are drawing flows on their own fundamentals rather than simply shadowing Wall Street.

The bullish case is that Japan’s corporate reforms and Korea’s export cycle continue to pull in capital, especially if U.S. rates ease and the dollar stabilises. The bearish case is that any renewed spike in oil, a worsening of Middle East tensions or a slowdown in China could quickly pressure regional risk assets, particularly in Korea where semiconductor exposure is high. For investors, the key is that Japan and Korea are not just participating in the rally — they are helping define whether Asia’s equity rebound has staying power.