Japanese shareholders yesterday had their 10th best day since the start of 2009 with the Nikkei 225 up almost 4 per cent. Since the market had its first whiff of Abenomics in mid-November, the policies of new prime minister Shinzo Abe have driven it up 32 per cent. Rarely has a new leader been so popular with stock markets.

But all is not as it seems. The rally has taken place against a background of a global bull market as the US avoided the first part of the fiscal cliff, confidence grew in the eurozone (it is now partly reversing) and China kept expanding. So what, one might reasonably ask? Global stocks are up only 12 per cent since mid-November, while the S&P 500 is up 11 per cent. Japan was clearly the place to be.

This was little to do with Japanese shares though. Even after yesterday’s performance, the extra return from the Nikkei has almost all been about the currency. Investors would have produced pretty much the same return by buying the S&P 500 hedged in yen. Indeed, this year Japanese shares have underperformed the US, UK and eurozone when adjusted for the currency.