The tug of war between Merrill Lynch's Hong Kong and Tokyo equities teams is over, for the time being. Just one year after ceding control of the group to Hong Kong, the top equities job has once again moved back to the Japanese capital.

In fact, the entire global markets group for Japan, non-Japan Asia and Australia will now be headed from Tokyo. Simon Brookhouse, who brought the Japanese equities business to Hong Kong in September 2002, has now left Asia and the equities job switches back to Japan. Osman Semerci, who until now headed the Asian debt markets group, will become head of Pacific-Rim global markets.

In September 2002 the bank made what appeared to be a strategic decision to run all Asian equities from Hong Kong. Simon Brookhouse was running the equities business for non-Japan Asia and Australia from Hong Kong at the time and with the addition of the Japanese franchise he took control for the entire region. It was, for a brief while, a coup. Junichi Nagaya, then Japanese equities boss, disappeared on sabbatical and the Tokyo research head, Kiyoshisha Ota, retired.

Brookhouse said at the time: "This move is not just about cost-cutting per se, but is also about extracting greater value from what we have. We want to be as profitable and efficient as possible. I hope we can make the business more effective."

But those comments were made in a different climate. Today, the Nikkei is rising again. Even a mild rally would be foolhardy to ignore given the size of Japan's economy.