The flow of funds out of Western markets into Asia looks set to continue in 2004. The big question is whether support from Asian banks will be sufficient to stop a dollar rout as the year grinds on.

More funds flowed into Japanese equities than those of any other country in the region last year as investors piled in on the back of hedge funds, which spotted the opportunity in the spring. Japan's Nikkei index rose by nearly half and on December 15 it stood at 10,491.