U.S. equity returns have been strong for an extended period, and most are thinking that they won’t be able to continue their strong run indefinitely. If we take a step back and assess some of the factors contributing to the strong U.S. equity run, we may be able to locate those—or at least similar—conditions beginning to show themselves in other markets.

Last Friday, the Bank of Japan decided to adjust monetary policy. The policy board voted to keep constant the quantity of balance sheet growth ay Y80 trillion per annum; but it voted to change the “quality” of its future asset purchases.

In several periods over the past decade, many sophisticated investors sought to profit from a rise in Japanese interest rates. Given the perpetually slow growth, combined with an ever-increasing long-term debt burden, they believed that the economic fundamentals did not support the lowest borrowing rates in the world. However, very few of these investors were ever able to profit from their economic thesis.

One of the most talked about investment themes of 2013 has been the dramatic turnaround in the Japanese economy as a result of Abenomics. While equities and the value of the yen have dominated headlines, one area investors might not be as familiar with is the Japanese government bond (JGB) market.