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Nikkei Stock Average

The Nikkei Stock Average is one of Japan's leading stock price indices, calculated based on the stock prices of 225 representative issues listed on the Prime Market of the Tokyo Stock Exchange.

How It Is Calculated

The Nikkei Stock Average is calculated using a "price-weighted method," which adjusts for the effects of stock splits and similar events based on the stock prices of the 225 constituent stocks. As a result, the price movements of stocks with high per-share prices (so-called "high-priced stocks") tend to have a larger effect on the overall index.

Difference from TOPIX

Because TOPIX is calculated using a market-cap-weighted method, the two indices are calculated differently. While they often move in a similar direction, they do not move identically at all times. To gain a more multifaceted view of overall market trends, it can be useful to check both indices.

This article is provided for general informational purposes only and does not recommend or solicit the purchase or sale of any specific investment method or security. Final investment decisions are your own responsibility.

Frequently Asked Questions

How does the Nikkei Stock Average differ from TOPIX?
The Nikkei Stock Average is calculated using a price-weighted method based on the stock prices of 225 constituent stocks, and it tends to be strongly influenced by stocks with high per-share prices (so-called "high-priced stocks"). TOPIX, on the other hand, is calculated using a market-cap-weighted method, so it tends to be strongly influenced by stocks with large market capitalizations.
If the Nikkei Stock Average rises, will the stocks I hold also rise?
The Nikkei Stock Average is one indicator showing overall market trends, and it does not guarantee the price movement of individual stocks. Individual stocks can move differently from the index.

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