TOPIX and Nikkei225

Update : Jan. 11, 2013


1. Stock Price Index

The stock price indices are statistical indicators of trends in the financial market. TOPIX and Nikkei 225 are commonly used indices in Japan. As important economic indicators, precision and continuity are vital to their calculation.

2. Differences between TOPIX and Nikkei 225

(Tokyo Stock Price Index)
Nikkei 225
Provider Tokyo Stock Exchange, Inc. (TSE) Nihon-Keizai-Shimbun(newspaper publisher)
Issue Composition All companies listed on the TSE First Section 225 Companies listed on the TSE First Section
No. of Constituents About 1,700 225
Methodology Free-float adjusted market capitalization weighted Average price weighted
Unit Point Yen

(a) Methodology


Free-Float Adjusted Market Capitalization Weighted

TOPIX expresses fluctuations in the market capitalization of all domestic stocks listed on the TSE First Section, with the market value on January 4, 1968 (base market value) set at 100 points.
TOPIX is most affected by issues with high aggregate market value.


Average Price Weighted

Nikei 225 is affected by high-priced stocks.

<Calculation Method of the World Index>

* Red…Market Capitalization Weighted / Blue…Average Price Weighted

(b) Sub-indices

TSE calculates and publishes TOPIX (Tokyo Stock Price Index) as well as other indices such as Size, Sector, and Style Indices. By offering indices calculated from various constituencies, TSE provides for a wide variety of investor needs.

<Lineup of TSE indices>

(c) Constituent review


TOPIX has no constituent review because it is based on all domestic common stocks listed on the First Section of TSE.
The number of constituents will change according to new listings and delistings.

Nikkei 225

Nikkei 225 is calculated from a selection of 225 domestic common stocks listed on the First Section of TSE. In order to provide accurate market movements and sector balance, constituent review of indices for the Nikkei225 is conducted annually.

3. Usage

(a) Usage as "Stock Market & Economic Indicator"

Television, newspapers and financial information vendors use indices as stock market indicators.


The Japanese government uses TOPIX as their leading economic indicator.

(b) Usage as "Benchmark"

Indices have an important usage as assets benchmark. As a benchmark, indices are used for the evaluation standard of asset management.


Institutional investors including pension fund and investment fund managers use TOPIX as a benchmark to evaluate their Japanese market portfolios.

(c) Usage for "Financial Products"

Indices are used for diversified investments for pension funds or the investment trusts because of their indications of comprehensive stocks movements.


TOPIX-ETF, the largest ETF in Japan, is traded on TSE. Global investors can hedge Japanese stock portfolios using TOPIX futures and options.

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