Just as world markets were recovering their appetite for risk, so, right on cue, trading in the Japanese yen provided a reminder that risk aversion is not always so irrational.

Risk appetite had returned as the major stock indices came close to completing their recovery after the sharp correction in May. There have been many signs of this. The spreads payable on non-investment-grade debt have come down sharply in the past few weeks; the bond market is showing remarkable confidence that the Federal Reserve is done with rate rises, with the Fed Funds futures market now putting the chance of any further rate rise this year at about 10 per cent; and the Chicago Board Options Exchange’s Vix index, which infers volatility from the amount that investors are prepared to pay to protect themselves from swings in the S&P 500, has just dropped back below 12 having hit 24 in June.