Nikkei 225

The Nikkei 225 (日経平均株価, Nikkei heikin kabuka), more commonly called the Nikkei, the Nikkei index, or the Nikkei Stock Average[1][2] (/ˈnɪkeɪ, ˈniː-, nɪˈkeɪ/), is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the Nihon Keizai Shimbun (The Nikkei) newspaper since 1950. It is a price-weighted index, operating in the Japanese Yen (JP¥), and its components are reviewed once a year. The Nikkei measures the performance of 225 large, publicly owned companies in Japan from a wide array of industry sectors.[3]

Nikkei 225
Foundation7 September 1950 (1950-09-07)
OperatorNihon Keizai Shimbun
(The Nikkei)
(Nikkei, Inc.)
ExchangesTokyo Stock Exchange (TSE)
Constituents225
Weighting methodPrice-weighted index
Related indicesTokyo Stock Price Index (TOPIX)
WebsiteNikkei 225

The Nikkei 225 began to be calculated on 7 September 1950 (1950-09-07), retroactively calculated back to 16 May 1949. Since January 2010, the index is updated every 15 seconds during trading sessions.

The Nikkei 225 Futures, introduced at Singapore Exchange (SGX) in 1986, the Osaka Securities Exchange (OSE) in 1988, Chicago Mercantile Exchange (CME) in 1990, is now an internationally recognised futures index.[4]

The Nikkei average has deviated sharply from the textbook model of stock averages, which grow at a steady exponential rate. The average hit its all-time high on 29 December 1989, during the peak of the Japanese asset price bubble, when it reached an intra-day high of 38,957.44, before closing at 38,915.87, having grown sixfold during the decade. Subsequently, it lost nearly all these gains, closing at 7,054.98 on 10 March 2009 — 81.9% below its peak twenty years earlier.

Another major index for the Tokyo Stock Exchange is the Tokyo Stock Price Index (TOPIX).

On 15 March 2011, the second working day after the massive earthquake in the northeast part of Japan, the index dropped over 10% to finish at 8605.15, a loss of 1,015 points. The index continued to drop throughout 2011, bottoming out at 8160.01 on 25 November, putting it at its lowest close since 10 March 2009. The Nikkei fell over 17% in 2011, finishing the year at 8455.35, its lowest year-end closing value in thirty years, when the index finished at 8016.70 in 1982.[5]

The Nikkei started 2013 near 10,600, hitting a peak of 15,942 in May. However, shortly afterward, it plunged by almost 10% before rebounding, making it the most volatile stock market index among the developed markets. By 2015, it has reached over 20,000 mark; marking a gain of over 10,000 in two years, making it one of the fastest growing stock market indexes in the world. However, by 2018, the index growth has been more moderate at around the 22,000 mark.

There is concern that the rise since 2013 is artificial and due to purchases by the Bank of Japan ("BOJ").[6][7] From a start in 2013, by end 2017, The BOJ owned circa 75%[8] of all Japanese Exchange Traded Funds ("ETFs"), and are a top 10 shareholder of 90% of the Nikkei 225 constituents.[9][10]

Weighting

The index is a price-weighted index. As of late 2014, the company with the largest influence on the index is Fast Retailing (TYO: 9983).

Annual returns
Nikkei 225 from 1970 to 2018

The following table shows the annual development of the Nikkei 225, which was calculated back to 1914.[11][12][13]

Year Closing level Change in Index
in Points		 Change in Index
in %
191421.12
191532.1010.9851.99
191641.619.5129.63
191741.40−0.21−0.50
191842.210.811.96
191953.6311.4227.06
192027.44−26.19−48.83
192128.881.445.25
192223.97−4.91−17.00
192322.83−1.14−4.76
192424.451.627.10
192527.963.5114.36
192627.25−0.71−2.54
192725.82−1.43−5.25
192825.65−0.17−0.66
192921.32−4.33−16.88
193016.82−4.50−21.11
193116.28−0.54−3.21
193230.3314.0586.30
193334.123.7912.50
193432.30−1.82−5.33
193533.761.464.52
193635.942.186.46
193737.331.393.87
193833.66−3.67−9.83
193944.9611.3033.57
194037.42−7.54−16.77
194142.445.0213.42
194242.710.270.64
194342.11−0.60−1.40
194441.82−0.29−0.69
194540.53−1.29−3.08
194628.72−11.81−29.14
194739.3110.5936.87
194872.8433.5385.30
1949109.9137.0750.89
1950101.91−8.00−7.28
1951166.0664.1562.95
1952362.64196.58118.38
1953377.9515.314.22
1954356.09−21.86−5.78
1955425.6969.6019.55
1956549.14123.4529.00
1957474.55−74.59−13.58
1958666.54191.9940.46
1959874.88208.3431.26
19601,356.71481.8355.07
19611,432.6075.895.59
19621,420.43−12.17−0.85
19631,225.10−195.33−13.75
19641,216.55−8.55−0.70
19651,417.83201.2816.55
19661,452.1034.272.42
19671,283.47−168.63−11.61
19681,714.89431.4233.61
19692,358.96644.0737.56
19701,987.14−371.82−15.76
19712,713.74726.6036.57
19725,207.942,494.2091.91
19734,306.80−901.14−17.30
19743,817.22−489.58−11.37
19754,358.60541.3814.18
19764,990.85632.2514.51
19774,865.60−125.25−2.51
19786,001.851,136.2523.35
19796,569.47567.629.46
19807,116.38546.918.33
19817,681.84565.467.95
19828,016.67334.834.36
19839,893.821,877.1523.42
198411,542.601,648.7816.66
198513,113.321,570.7213.61
198618,701.305,587.9842.61
198721,564.002,862.7015.31
198830,159.008,595.0039.86
198938,915.878,756.8729.04
199023,848.71−15,067.16−38.72
199122,983.77−864.94−3.63
199216,924.95−6,058.82−26.36
199317,417.24492.292.91
199419,723.062,305.8213.24
199519,868.15145.090.74
199619,361.35−506.80−2.55
199715,258.74−4,102.61−21.19
199813,842.17−1.416,57−9.28
199918,934.345,092.1736.79
200013,785.69−5,148.65−27.19
200110,542.62−3,243.07−23.52
20028,578.95−1,963.67−18.63
200310,676.642,097.6924.45
200411,488.76812.127.61
200516,111.434,622.6740.24
200617,225.831,114.406.92
200715,307.78−1,918.05−11.13
20088,859.56−6,448.22−42.12
200910,546.441,686.8819.04
201010,228.92−317.52−3.01
20118,455.35−1,773.57−17.24
201210,395.181,939.8322.94
201316,291.315,896.1356.72
201417,450.771,159.467.12
201519,033.711,582.949.07
201619,114.4080.690.42
201722,764.943,650.5419.10
2018 20,014.77 −2,750.17 −12.08
2019 23,656.62 3,641.85 18.20

Components

As of April 2018, the Nikkei 225 consists of the following companies: (Japanese securities identification code in parentheses)[14]

Foods

Textiles & apparel

Pulp & paper

Chemicals

Pharmaceuticals

Oil & coal products

Rubber products

Glass & ceramics

Steel products

Nonferrous metals

Machinery

Electric machinery

Shipbuilding

Automotive

Precision instruments

Other manufacturing

Fishery

Mining

Construction

Trading companies

Retail

Banking

Securities

Insurance

Other financial services

Real estate

Railway/bus

Other land transport

Marine transport

Air transport

Warehousing

Communications

Electric power

Gas

Services

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See also

References
  1. "the Nikkei (index) definition, meaning - what is the Nikkei (index) in the British English Dictionary & Thesaurus". cambridge.org. Cambridge Dictionaries Online.
  2. "Nikkei 225". Yahoo.com. Yahoo. Archived from the original on 12 December 2011.
  3. Overview of the Nikkei 225 Stock Market Index
  4. Nikkei Net interactive Archived 22 December 2008 at the Wayback Machine
  5. "Finfacts: Irish business, finance news on economics". FinFacts.com.
  6. "Japan Central Bank's ETF Shopping Spree Is Becoming a Worry". Bloomberg. 18 July 2017.
  7. "Japan's Central Bank Is Distorting the Market, Bourse Chief Says". Bloomberg. 19 July 2017.
  8. "Bank of Japan's $150 Billion ETF Binge Looks Likely to Slow Next Year". Bloomberg. 10 December 2017.
  9. "BoJ Now A Top 10 Shareholder In 90% Of Nikkei 225". Barrons. 24 April 2017.
  10. "What Happens When The Bank Of Japan Owns Everything?". Forbes. 27 April 2016.
  11. "Finfacts: Irish business, finance news on economics". www.finfacts.com. Retrieved 19 January 2020.
  12. "Historical Data (Nikkei 225) - Nikkei Indexes". indexes.nikkei.co.jp. Retrieved 19 January 2020.
  13. "NIKKEI 225 Index (Japan) Yearly Stock Returns". www.1stock1.com. Retrieved 19 January 2020.
  14. "Components:Nikkei Stock Average (Nikkei 225)". Nikkei Indexes. 24 April 2018.
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