China Industrial Profits Turn Positive; Yen Falters on Fiscal Woes

Asian markets showed mixed signals on Tuesday, characterized by a fundamental recovery in China's industrial base contrasted with currency weakness in Japan and India.

China's “Anti-Involution” Policies Pay Off

Data released by China's National Bureau of Statistics reveals a pivotal turnaround: Industrial profits rose 0.6% for the full year 2025, ending three consecutive years of decline. December alone saw a robust +5.3% surge.

Analysts attribute the recovery to Beijing's “anti-involution” policies designed to curb destructive price wars and boost internal demand.

• Equipment Manufacturing: The strongest driver, up 7.7%.
• High-Tech Manufacturing: surged 13.3%.

This recovery provides fundamental support for the Australian Dollar (AUD), which often trades as a liquid proxy for Chinese industrial demand.

JPY and INR Under Pressure

Despite the positive regional data, the Japanese Yen (JPY) weakened, allowing EUR/JPY to recover above 183.55. Investors remain jittery regarding Japan‘s fiscal health ahead of the Bank of Japan’s (BoJ) meeting minutes release.

Meanwhile, the Indian Rupee (INR) remains pinned near historic lows. The USD/INR pair continues to hover near its all-time high of 91.96, disregarding the optimism surrounding the recent India-EU free trade agreement. The pair has maintained a winning streak since mid-January.