Looking at a 3 month and 6 month relative pricing chart, you can see the Hang Seng is the worst performing and has been drifting lower, under-performing all other markets on a 3 month and 6 month basis.
3M - Relative Performance
6M - Relative Performance
What is also interesting is that the Nikkei has been lagging right behind the Hang Seng, but on a 3 month basis the Nikkei experienced a negative 20-22% performance spread against the Brazilian Bovespa shrink, from Nov to today, to a negative 7-8% spread vs that same market. This means the Nikkei outperformed by 12-14% from that spread low. You'll also notice the negative Nikkei spreads disappear vs. world markets on a 3 month basis.
This means a long/short strategy is emerging. If you would have been long the Nikkei futures, and Short the Bovespa futures, you would have experienced a risk adjusted net gain due to the squeezing of the spread. Going forward, I believe, you can still implement such strategy if your risk appetite allows.
Can the Nikkei takeover world leadership long-term?
Let's look at the charts.
Here is a medium term chart showing a possible NIKKEI channel. We need to bounce here soon, but many indicators are supporting this rising channel.
10 Year Chart
There are many tell tale signs that the Nikkei may enjoy some leadership going forward. Their markets have consolidated their massive excessive bubble's for 20yrs. The US markets have now been in a 10yr consolidation phase - maybe another 10 before we actually bottom, who knows. But one thing is for sure, nothing is certain, not even the certainty that the Nikkei is poised for leadership.