Actually, outside of Spain, there had not been any large Jewish populations, and that one involved something between 60,000 to 100,000 people at the time of the expulsions.
Populations were far smaller in those days than we are used to in modern times, so 60K folks is, for the time, a fair population. Still, when you consider that at least half of the Spanish Jews ventured East to Baghdad, or just to Morocco rather than North to Poland, it's not difficult to believe that they were able to do so without some degree of certainty that they would arrive ~ it's not like millions of people being driven into the wilderness.
The more I study the movement of the Ladino speaking population of Medieval Spain the more I wonder just who could have been the "Jews" Luther was disappointed about not being able to convert. The suspicion grows that we are discussing a few dozen, or maybe as many as a hundred, and not at all the tens of thousands of popular imagination.
Fur Shur, if I'd been there at the time I'd have moved to Poland and left the Germans and their nasty little manure clogged towns alone, and that's a thought not to be scoffed at. Although Poland was less developed, populations were lower, food was more plentiful, the people were obedient to the local lords, and the king thought highly of Jews ~ his ambition was simple ~ to gain in a single generation the sort of economic and industrial development it took centuries to build in Spain and Italy. A progressive guy like that just had to be attractive to what was then the world's largest industrial class.
Not that this justifies Luther's ravings, but the strong suggestion is there that ALL of them were directed at the Catholics, including the need to "convert" them to his point of view.
If I can jump into being un-PC: The Jews "started it." By stripping Christians of their status as members of various synagogues, Christians were exposed to the Roman draft, which had exempted Jews. Of course, laying this fault on the Jews is desperately unfair, since the Jews could very reasonable be afraid that Christian goal of gaining converts would be taken as a deal-breaker between the Jews and the Romans: The exemption was insignificant to the Romans, and worth the price to keep the peace with the Jews who were an amazingly strong threat to the empire, having prevously been the catalyst for the destruction of the Hellenic empire. It's a totally false notion that the Jews were a small, insignificant portion of the Roman population; in fact, a long secession of emporers preceded Pilate as governors of Judea. Christianity threatened to make the numbers of the Jews overwhelming. Excluding the Christians was likely the only way of maintaining the exemption for any Jews at all.
However, once excluded, the Christians became the focus of many brutal, vicious persecutions because they refused to worship the Emperor and related Roman gods, as all soldiers were required to do.
Because of the sharp split between Christian and Jew, initiated by the Jews, by the time the gospels were in their final edits, "Jew" became not synonymous with the children of Abraham, but referred exclusively to those Jews who explicitly rejected Christ. Hence, "the Jews," as used in the gospels never included the apostles, Jesus and his family, or the throngs who came to hear Jesus preach, even though most Christians at the time they were written would have considered themselves Jewish. (Paul gives a false impression by suggesting that his people had rejected Christ. By this, he meant only the residents of the Kingdom of Judea and of Galilee; Many Hellenic Jews did become Christian.)
Nonetheless, throughout history, Christian attitudes towards Jews ranged from condescending to hostile, in clear violation of the message of Christ. No denomination in Europe is sinless in their mistreatment of Jews.
By the time of Luther, Jews were seen as resistant and contrarian outsiders living in the midst of Christians, belying the supposition that everyone would become Christian if only made aware of the benefits. As such, they were reasonably, but unjustly seen as a threat to any consensus necessary for maintaining a strong nation.