Germany (EWG) vs Japan (EWJ)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
Germany and Japan are both export-oriented developed economies. EWG outperformance signals European industrial strength and China demand. EWJ outperformance signals yen weakness, Japanese reflation, and domestic corporate governance reforms. The ratio captures different developed-market reflation themes.
Cross-Asset Analysis
Germany / DAX (EWG) (iShares MSCI Germany ETF, proxy for the DAX and German equity market) 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. Interest rate cycles drive Germany / DAX (EWG) versus Japan / Nikkei (EWJ) relative performance through discount-rate sensitivity, with longer-duration exposures suffering more when rates rise. Overlay strategies trade the Germany / DAX (EWG)-Japan / Nikkei (EWJ) spread through options or swaps when the underlying pair is directly tradable, sizing against realized spread volatility.
Structural changes inside Germany / DAX (EWG) or Japan / Nikkei (EWJ), such as index reconstitution or methodology shifts, can break historical spread relationships in discrete jumps. Pairs like Germany / DAX (EWG) and Japan / Nikkei (EWJ) trade tighter than either leg does individually, because the common component is high and the remaining idiosyncratic share is what the pair expresses. The Germany / DAX (EWG)-Japan / Nikkei (EWJ) spread captures the tilt between two variants of the same asset: one may be more defensive, one more cyclical.
Pairs trading between Germany / DAX (EWG) and Japan / Nikkei (EWJ) is common because the spread is more stationary than either individual price, suitable for mean-reversion strategies. Factor tilts expressed through the Germany / DAX (EWG)-Japan / Nikkei (EWJ) selection allow managers to adjust style exposure without changing their overall asset allocation.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between Germany / DAX (EWG) and Japan / Nikkei (EWJ)?+
Germany / DAX (EWG) and Japan / Nikkei (EWJ) are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between Germany / DAX (EWG) and Japan / Nikkei (EWJ) captures the specific macro signal that flows through this relationship.
When does Germany / DAX (EWG) typically lead Japan / Nikkei (EWJ)?+
Germany / DAX (EWG) tends to lead Japan / Nikkei (EWJ) during rotation episodes between the two factor exposures. In those periods, moves in Germany / DAX (EWG) precede corresponding moves in Japan / Nikkei (EWJ) by days to weeks, depending on the transmission channel and the depth of each market.
How are Germany / DAX (EWG) and Japan / Nikkei (EWJ) historically correlated?+
Long-run correlation between Germany / DAX (EWG) and Japan / Nikkei (EWJ) varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. 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 Germany / DAX (EWG)-Japan / Nikkei (EWJ) relationship.
What macro conditions drive divergence between Germany / DAX (EWG) and Japan / Nikkei (EWJ)?+
Divergence between Germany / DAX (EWG) and Japan / Nikkei (EWJ) typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. 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 Germany / DAX (EWG) or Japan / Nikkei (EWJ).
Is Germany / DAX (EWG) a hedge for Japan / Nikkei (EWJ)?+
Peers like Germany / DAX (EWG) and Japan / Nikkei (EWJ) do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the Germany / DAX (EWG)-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.