Why Hong Kong has become this year’s worst-performing stock market

There are many disconnects in financial markets.

One of them is Japan’s benchmark 10-year bond yield, which currently stands at just 2.7 per cent despite the country’s large public debt burden – more than 240 per cent of economic output.

Although Japanese bond yields have risen sharply in the past three years, the 10-year yield is slightly lower than that of Germany, whose government debt as a percentage of economic activity is around one-quarter the size of Japan’s.

Another anomaly is the...