Japan and China have resumed quantitative easing as of Q4 2022 / Could this be partially responsible for current rally?

While Fed and ECB continue tightening, the BOJ and PBOC are now printing money once again.

https://www.yardeni.com/pub/peacockfedecbassets.pdf

This began in Q4 2022 in earnest and the two combined are now out printing the deceleration from Fed and ECB.

The previous longest pause between new highs in global monetary supply was two years (2018->2020). We are past one year since previous peak. We may surpass the pause between 2018->2020 but we are probably heading above the Q4 2021 value at some point in 2024 and the fact that two major central banks have now resumed QE is reassuring in that regard.

Japan has historically been the most consistent in engaging in substantive enduring QE (and it has also printed the most proportionally by far). The pivot by BOJ is likely a sign that this stance is going to continue if history is any guide. Japan's previous asset high was $7T which puts $2T back on the table if they hit that number, they have deprinted substantially so they have a decent amount of room to hit it and go beyond before the Fed and ECB follow suit.

China is less certain as they have not been as into QE as Japan recently, but with demographic headwinds now kicking in there is a chance this could be a relatively short / medium term spurt or it could be the start of a more enduring effort.

In either case, the combination of Japan and China printing for the next year (presumably) could more than outweigh tightening by the Fed and ECB and also give the Fed and ECB cover to pause rate hikes before engaging in cuts and returning to QE.

TLDR: the mantra don't fight the Fed ignores central bank policy across the rest of the planet, with global monetary supply now increasing at a moderate to strong monthly pace due to the BOJ and PBOC, there is a decent likelihood this extra $$$ is already sloshing into equities and if it continues, there is a chance we could move significantly higher in 2023 in spite of Fed + ECB. As Japan and China print large amounts of $, this also allows Fed and ECB more room to print once rates are back near 0 in 2024.