Back in January, investors could be forgiven for hedging their bets when weighing the chances that China could surprise with a recovery against Japan’s ability to reflate its economy after two decades of disappointment. By the end of January, Hong Kong’s Hang Seng and the Topix were neck-and-neck, up 5 per cent. Then the mood changed. Anyone still betting equally on the two will have given up more than a third of their one-fifth return on Japan covering Hong Kong losses. No surprise that there are anecdotal reports of investors selling the latter to fund Tokyo trades. But switching from China to Japan is simplistic.

China’s strength could well be underrated. Keeping the juggernaut growing at 7.7 per cent in the first quarter disappointed some, but was no small achievement. Exports were stronger and investments were steady although consumption undershot. That could recover if indeed it was China’s change in leadership and a corruption crackdown that unsettled spenders. But even Li Keqiang, premier, tempered talk of a smooth start to this year by adding that the situation was complicated. It will not become simpler as Beijing struggles to improve growth, manage a credit boom, calm inflation and cool property markets. All as investors pore over data they do not trust fully in a country few know well.

Hong Kong is not a perfect proxy for the mainland, but it is the most liquid means of making China bets. Tokyo’s rally has brought the Topix price/book ratio – long a measure of Japan’s apparent cheapness – to 1.3 and within a whisker of the Hang Seng for the first time in six-plus years. Yet there is little hard evidence as yet that reflation is taking hold in Japan beyond an almighty rally and big plans. In other words, the world’s third and second-largest economies are both too complex to be played in simple on/off trades.