Japan
China
South Korea
India
TaiwanUnderstanding the Asia
Asia rewards market-by-market analysis more than any other region, because its constituents could hardly be more different. Japan is the anchor of developed Asia and a uniquely instructive market. Its 1989 bubble remains the textbook example of what happens when valuations detach entirely from fundamentals, ushering in decades of stagnation. Modern Japan must be read alongside the Bank of Japan extraordinary footprint, a central bank so active it has bought equity ETFs directly, structurally supporting the market and giving Japanese valuations a policy-driven component absent almost everywhere else.
China is a special case among major markets: young, dominated by domestic retail investors, and subject to significant state ownership and heavy government intervention. Its market-cap-to-GDP ratio runs far lower than Western markets because so much economic value sits in state-owned and unlisted firms. Sharp moves in Chinese equities often reflect policy shifts and regulatory campaigns as much as fundamentals, and the greatest systemic risk sits in the heavily-indebted property sector, which is why we track a dedicated China property and liquidity stress gauge.
South Korea and Taiwan are the technology heart of the region, their markets dominated by the semiconductor manufacturing that underpins the entire global electronics supply chain. They are geared, sometimes violently, to the chip cycle, and they carry a geopolitical premium, cross-strait tension in Taiwan case, that conventional valuation cannot fully capture. India, by contrast, offers a domestic growth story: one of the fastest-growing major economies, a young population and a large consumer base, which has earned its market a persistent valuation premium over its regional peers.
Reading these markets together, Japan policy-distorted valuations, China state-driven cycles, the chip-geared volatility of Korea and Taiwan, and India growth premium, gives a picture of Asia that no single regional index could convey, and it is exactly the kind of granularity a serious investor needs before committing capital to the region.