The correlation between the global equities and EURJPY is estimated to be as high as 93 percent.
The price action this week confirms that the correlation is very much intact with Dow strength on Monday leading to sharp gains and the corresponding weakness over the past 2 days leading to meaningful corrections. Even though Japan reported weaker a tertiary activity index, the market has stopped caring about Japanese economic data and comments from the central bank. This comes in stark contrast to the importance they give to US and UK data for example. The problem for Japan is that regardless of how much the central bank wants to lift interest rates, the economy is vulnerable to a significant slowdown because growth is concentrated in Tokyo while other regions of the country are still struggling. Therefore a rate hike in the near future is not a realistic possibility.