Some market moments feel louder than others; not because of headlines alone, but because several signals arrive at once and prompt investors to rethink the bigger picture. The last week of January and the first week of February was one of those moments.
Japanese equities have attracted attention, with the Nikkei 225 returning to levels last seen in the late 1980s and the TOPIX moving higher. This rebound has prompted investors to revisit a market associated with slow growth. The tone around Japan has changed, and not just at the margin. The key question now is whether this strength reflects improvement in how companies are run, or whether it is being flattered by a weaker yen and overseas investors positioning for gains.
Europe has long traded at a valuation discount to the US, visible across simple headline metrics such as P/E and P/B. What is more striking is that, even in 2026 and even after periods of strong performance in European indices, the discount remains wide enough to keep resurfacing in allocation discussions. So, the question is not whether Europe is “cheap” in relative terms, but whether the discount is beginning to look excessive in relation to the region’s earnings outlook and balance-sheet resilience, or whether it still reflects deeper, structural differences that are unlikely to disappear.
After the inflation shock of 2022 and 2023, price pressures have finally started to cool. Inflation has not disappeared, but it has slowed, and that phase is known as disinflation. Prices are still rising, just not at the pace that unsettled households, policymakers, and markets a couple of years ago.
