USD/JPY vs Japan ETF (EWJ)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
Yen weakness (rising USD/JPY) has historically supported Japanese exporters and thus EWJ. However, EWJ is USD-denominated, so yen weakness reduces dollar-translated returns. When USD/JPY rallies with EWJ, Japanese corporate strength outweighs currency translation. When USD/JPY rallies while EWJ falls, yen weakness is not saving corporate earnings.
Cross-Asset Analysis
JPY/USD (japanese yen to US dollar exchange rate) and Japan / Nikkei (EWJ) (iShares MSCI Japan ETF, proxy for the Nikkei 225 and Japanese equity market) are priced in separate markets, yet their co-movement tells macro desks something neither series reveals alone. Risk-off regimes tighten correlations and compress the JPY/USD-Japan / Nikkei (EWJ) spread into narrower ranges. Analysts merge JPY/USD with Japan / Nikkei (EWJ) to build cross-asset indicators that are harder to game than any single-market series.
Leverage embedded in the two markets behind JPY/USD and Japan / Nikkei (EWJ) amplifies the same shock at asymmetric magnitudes. Policy interventions can synthetically narrow or expand the JPY/USD-Japan / Nikkei (EWJ) spread, most notably when central banks absorb specific asset classes. Correlation trading desks quote options on the JPY/USD-Japan / Nikkei (EWJ) spread once the core relationship has been mapped across sufficient regimes.
Cross-asset pairs like JPY/USD against Japan / Nikkei (EWJ) surface the macro variables that span asset classes: liquidity, inflation, real rates, and risk appetite. Regime dating based on JPY/USD-Japan / Nikkei (EWJ) can be self-reinforcing, because extreme spread values often resolve via mean reversion or regime change.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between JPY/USD and Japan / Nikkei (EWJ)?+
JPY/USD and Japan / Nikkei (EWJ) are connected through shared macro drivers across asset classes. When the dominant macro driver shifts, both respond, though with different sensitivities and at different speeds. The spread between JPY/USD and Japan / Nikkei (EWJ) captures the specific macro signal that flows through this relationship.
When does JPY/USD typically lead Japan / Nikkei (EWJ)?+
JPY/USD tends to lead Japan / Nikkei (EWJ) during macro regime changes, where the more liquid asset moves first. In those periods, moves in JPY/USD precede corresponding moves in Japan / Nikkei (EWJ) by days to weeks, depending on the transmission channel and the depth of each market.
How are JPY/USD and Japan / Nikkei (EWJ) historically correlated?+
Long-run correlation between JPY/USD and Japan / Nikkei (EWJ) varies by regime. Cross-asset correlations vary by regime, tending to tighten in stress and loosen during normal conditions. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the JPY/USD-Japan / Nikkei (EWJ) relationship.
What macro conditions drive divergence between JPY/USD and Japan / Nikkei (EWJ)?+
Divergence between JPY/USD and Japan / Nikkei (EWJ) typically arises from idiosyncratic shocks in one asset, policy interventions, or structural shifts in demand. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in JPY/USD or Japan / Nikkei (EWJ).
Is JPY/USD a hedge for Japan / Nikkei (EWJ)?+
Cross-asset hedges between JPY/USD and Japan / Nikkei (EWJ) work when the macro drivers of the two assets are sufficiently decorrelated, which depends on the regime and therefore needs to be reviewed as conditions change. Effective hedging requires matching the hedge to the specific risk being protected, and the JPY/USD-Japan / Nikkei (EWJ) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.