Including this year to date, Chinese Equities are down for the third year in a row, while Japanese Equities are up for the fourth year in five. Covid, Geopolitics, and Index weightings for diversification are all part of the story, but we also think that just as western models that assumed low interest rates would cause inflation singularly failed to recognise their role in a savings based culture as return on savings on the downside, so they are also missing the point that higher rates will generate higher demand and inflation in Japan

The biggest challenges for markets are from cash - having been too cheap to borrow and too expensive to save, we now have the opposite, with some balance sheets under pressure while liquidity is syphoned out of equities and credit by high deposit rates. Market breadth is extremely narrow, with 493 stocks flat ytd and 7 up more than 50%. Much of this is tied into hype around AI.