The efficient-market hypothesis should still predict that we will see equal risk-adjusted returns from any country. If the US and Japan have equal risk (which they probably don’t but let’s say they do), and most people expect the US to see more economic growth, then the US market should be more highly valued than Japan’s to the point where the expected market returns from each are the same. Otherwise you could get an easy win by buying US stocks instead of Japanese stocks.
The efficient-market hypothesis should still predict that we will see equal risk-adjusted returns from any country. If the US and Japan have equal risk (which they probably don’t but let’s say they do), and most people expect the US to see more economic growth, then the US market should be more highly valued than Japan’s to the point where the expected market returns from each are the same. Otherwise you could get an easy win by buying US stocks instead of Japanese stocks.