The conditions needed to drive Asian markets

Andrew Graham, manager of the Martin Currie Pacific trust, argues the trend for earnings downgrades must reverse before stock markets can go higher.

So far, 2013 has been an interesting year for Asia Pacific investors as traditional roles within the market seem to have reversed. While the rest of the region has been playing catch-up with global indices, Japan has stormed ahead. In the four months to the end of April, the MSCI AC Asia ex Japan index has risen 9.3% in sterling terms compared with 14.6% from the MSCI AC World. Japan’s Topix index, meanwhile, gained 26.8% – and 36.8% in yen terms. For the Japanese market, the story has been fairly straightforward. Its rise has gone hand in hand with a sharp depreciation in the yen. Bo...