Japan’s most closely watched stock market index is the Nikkei225. It is made up of 225 liquid and largest companies listed on Tokyo Stock Exchange. This index serves as a measure of Japan’s economic strength.
History of Nikkei 225
The Nikkei newspaper published the Nikkei225 index in 1950. The index was initially known as the Nikkei-Dow Jones Stock Average. It contained only 225 stocks. It has since been the benchmark benchmark in Japanese equity markets.
Composition of Nikkei 225
The Nikkei225 index consists of 225 companies that are the most liquid and largest listed on the Tokyo Stock Exchange. Selection criteria include market capitalization, liquidity and other factors. Fast Retailing and SoftBank Group were the three largest weighted members of the index as of January 20,23.
Calculation for the Nikkei-225 Index
The Nikkei-225 is not weighted according market capitalization. This makes it different from other stock indices. The index is weighted according to price, which means that companies with higher stock values have a greater impact on its performance. The index may be affected by this as companies with lower stock values receive less weighting.
Performance of Nikkei 2225
The Nikkei225 index has a long track record of volatility. It has experienced several major crashes over its lifetime. It hit a high of 38.916 in 1989. But, by 2009, the index had plummeted to a low level of 7,055. In recent years, the index has traded around the 30,000 mark and has recouped since.
Investing in Nikkei 225
Investors can get exposure to the Nikkei 2225 via a variety of methods including mutual funds and exchange traded funds (ETFs). These funds provide investors with a diverse portfolio that closely mirrors the index’s performance.
Conclusion
Investors from all over the world closely follow the Nikkei225, Japan’s most important stock market index. Despite its volatility history, the Nikkei 225 is still an important indicator of Japan’s economic health. Investors have access to some Japan’s largest and best-liquid companies.
