Several weeks into the final quarter of 2023 and Asian investors are starting to reflect on a year in markets that looks very different from the lofty expectations many had back in January…

Investor interest in Japanese equities has been relatively consistent throughout the year as the investment case has solidified. With big markets such as the US and Europe facing economic uncertainty and potential recession, Japan has seen consumer spending rise with a wave of tourist arrivals…

Meanwhile, on the other side of Asia, India has captured investor interest for completely different reasons. As it overtook China to become the world’s most populous nation this year, optimism around the economy has surged, with many investors buying into the narrative that India will take the baton from China as the world’s fastest-growing large economy in the coming decades…

How sustainable are the Japan and India investment theses? Both face clear risks. It’s impossible to ignore the many false dawns that Japanese equities have seen since the bursting of the asset bubble in 1991…

Japan and India can claim to be the investor darlings of 2023, but they have also benefited from the negative sentiment around China this year. Global capital that, in earlier years, might have gone to China went instead this year to other Asian destinations which remain core drivers of global growth…

A defining theme of 2024 will be whether these markets can sustain this high level of investor interest even as sentiment turns positive again in China. If so, we could be looking at a new stage of regional development.