Indicator: Japan vs U.S. market index ratio (EWJ / SPY)

Current value

0.1272

Updated 2026-03-18

Range

Min 0.1104

Max 0.1768

Mean 0.1362

Percentiles

1Y 81%

5Y 28%

10Y 14%

Correlation

1Y 0.0396

5Y 0.0251

Full 0.0071

EWJ vs SPY daily returns

Chart

Log

Relative move

-4.5%

7.6%

7.9%

ytd

4.1%

vs SPY — negative = EWJ lagged

Market Regimes

Regime	Macro axis	Change	Min	Max	Mean	Corr
Dot-com bubble / TMT mania 1995-08 → 2000-03	liquidity/valuation expansion	-53.1%	0.28	1.04	0.52	-0.0409
Dot-com bust / post-bubble disinflation scare 2000-03 → 2002-10	valuation compression/disinflation	-25.7%	0.24	0.48	0.34	0.0023
China-WTO / housing-credit / commodity boom 2002-10 → 2007-10	growth/credit expansion	+7.1%	0.28	0.46	0.37	0.0592
GFC / deleveraging / dollar shortage 2007-10 → 2009-03	credit stress/liquidity squeeze	+26.2%	0.31	0.47	0.38	-0.0513
Policy-led rebound / euro-sovereign-crisis overlay 2009-03 → 2012-07	easing/backstop	-38.7%	0.25	0.45	0.34	0.0906
Secular stagnation / QE / low inflation / duration bull 2012-07 → 2020-02	disinflation/low rates	-40.7%	0.16	0.3	0.23	0.0283
Pandemic shock / liquidity crash 2020-02 → 2020-03	liquidity shock	+40.9%	0.16	0.22	0.18	-0.0749
Policy bazooka / monetary euphoria 2020-03 → 2020-11	liquidity impulse	-9.5%	0.17	0.21	0.18	-0.1518
Reopening reflation / fiscal boom / supply bottlenecks 2020-11 → 2021-11	growth reopening	-21.4%	0.14	0.19	0.16	0.0368
Inflation shock / duration crash / aggressive tightening 2021-11 → 2022-11	inflation shock	+2.4%	0.12	0.15	0.14	0.0091
Disinflation rebound / AI-led narrow bull / higher-for-longer 2022-11 → 2024-09	disinflation + narrow equity leadership	-10.1%	0.12	0.15	0.14	0.0365
Disinflationary easing / resilient growth / AI capex under oil-shock test 2024-09 → now	disinflation under stress	-0.2%	0.11	0.14	0.12	0.0494

What is this indicator?

As most of naive country-to-country indicators, it does not compare one economy to another. This is more about structural differences in the economies and market regimes.

Japan has had 0% (or negative) interest rates for decades. Investors borrow Yen cheaply to buy US Tech. This ratio captures the friction between those two poles.

Japanese multinationals (Toyota, Nintendo) see earnings explode when the Yen is weak (because they sell in USD). However, since EWJ is priced in USD, a weak Yen lowers the ETF price.

Often, the Nikkei index (in Yen) hits all-time highs, but EWJ/SPY (in USD) stays flat because the currency devaluation cancels out the stock gains.

If BoJ hints at raising rates, the Yen strengthens -> The "Carry Trade" blows up -> US Tech (SPY) drops -> EWJ (in USD) might actually outperform on a relative basis.