Goldman Turns Bullish on Asia Stocks: Maintains ‘Overweight’ Stance on China, Japan, Korea Markets

Goldman Sachs strategists have raised their outlook on Asian stocks, citing a more favorable macro environment and increased tariff policy clarity.

Led by Timothy Moe, Goldman strategists upgraded the 12-month target for the MSCI Asia Pacific (ex-Japan) Index by 3% to 700 points in a report, suggesting a potential 9% return in dollar terms over that period.

 

“Tariff impositions and loose monetary policy could be key macro drivers for Asian stocks in Q3,” they noted, adding that even if tariffs exceed current baseline expectations, the impact on fundamental growth may be less negative than feared in early Q2.

 

They highlighted that with Asia stocks’ forward P/E of 14 aligning with “macro model fair value,” earnings growth will be a primary return driver.

 

Goldman maintains an “overweight” stance on China, Japan, and Korea stocks, while downgrading Malaysia to “underweight,” favoring North Asia markets.

 

Recently, China’s market has shown strength, with the Shanghai Composite Index surging back above 3,500 points on Wednesday—its first time in eight months since November 8, 2024—and up over 8% year-to-date.

 

On July 6, Goldman’s research team released a report titled “Striking the Return Chord in China’s Cash Symphony,” forecasting Chinese onshore and offshore listed companies will pay a record $3 trillion in dividends by year-end 2025.

 

In the current low-interest environment, Goldman expects rising dividend and buyback scales to attract more investors, potentially lifting company valuations.

 

The firm also upgraded Hong Kong stocks to “market weight,” citing their potential as a key beneficiary of a weaker dollar amid Fed easing. They added that Philippine and Taiwan stocks are “most sensitive and positively reactive” to these factors.

Bullish Chorus Grows

Recently, Bernstein analysts expressed optimism for Asia stocks in the second half of 2025, driven by expected foreign capital inflows, improved corporate earnings, and a loosening policy environment, particularly favoring Korea and India.

 

Earlier this week, Standard Chartered’s Wealth Solutions released its “H2 2025 Global Market Outlook,” noting that global central bank easing, a likely U.S. soft landing, and a weaker dollar favor risk assets. The bank upgraded Asia (ex-Japan) stocks to “overweight,” with a focus on China’s tech, communication services, and non-essential consumer goods sectors.