JPY/USD vs Dollar Index
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
The yen is the world's most rate-sensitive major currency because Japan has maintained near-zero rates for decades. When the Fed tightens and the BOJ stays loose, USD/JPY spikes. This has massive implications for global carry trades, Japanese investor flows (the world's largest creditor nation), and cross-asset correlations. A yen strengthening event can trigger global de-risking.
Cross-Asset Analysis
To orient the reader: JPY/USD represents japanese yen to US dollar exchange rate and Trade-Weighted Dollar (Broad) represents broad trade-weighted US dollar index, measures dollar strength vs major trading partners, which is why this comparison sits in the peer pair category on Convex. Performance attribution leans on JPY/USD-Trade-Weighted Dollar (Broad) spreads to separate security selection from style allocation inside multi-manager mandates. Pairs trading between JPY/USD and Trade-Weighted Dollar (Broad) is common because the spread is more stationary than either individual price, suitable for mean-reversion strategies.
Pairs like JPY/USD and Trade-Weighted Dollar (Broad) trade tighter than either leg does individually, because the common component is high and the remaining idiosyncratic share is what the pair expresses. JPY/USD and Trade-Weighted Dollar (Broad) look similar at a glance, but the embedded factor tilts between them matter a great deal over time. Factor tilts expressed through the JPY/USD-Trade-Weighted Dollar (Broad) selection allow managers to adjust style exposure without changing their overall asset allocation.
Structural changes inside JPY/USD or Trade-Weighted Dollar (Broad), such as index reconstitution or methodology shifts, can break historical spread relationships in discrete jumps. Idiosyncratic events in a concentrated peer, such as a single mega-cap earnings miss inside JPY/USD, can move the JPY/USD-Trade-Weighted Dollar (Broad) spread without broader factor signal.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between JPY/USD and Trade-Weighted Dollar (Broad)?+
JPY/USD and Trade-Weighted Dollar (Broad) 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 JPY/USD and Trade-Weighted Dollar (Broad) captures the specific macro signal that flows through this relationship.
When does JPY/USD typically lead Trade-Weighted Dollar (Broad)?+
JPY/USD tends to lead Trade-Weighted Dollar (Broad) during rotation episodes between the two factor exposures. In those periods, moves in JPY/USD precede corresponding moves in Trade-Weighted Dollar (Broad) by days to weeks, depending on the transmission channel and the depth of each market.
How are JPY/USD and Trade-Weighted Dollar (Broad) historically correlated?+
Long-run correlation between JPY/USD and Trade-Weighted Dollar (Broad) 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 JPY/USD-Trade-Weighted Dollar (Broad) relationship.
What macro conditions drive divergence between JPY/USD and Trade-Weighted Dollar (Broad)?+
Divergence between JPY/USD and Trade-Weighted Dollar (Broad) 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 JPY/USD or Trade-Weighted Dollar (Broad).
Is JPY/USD a hedge for Trade-Weighted Dollar (Broad)?+
Peers like JPY/USD and Trade-Weighted Dollar (Broad) 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 JPY/USD-Trade-Weighted Dollar (Broad) 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.