Nikkei – What is the Nikkei 225 index?

The Nikkei 225 (日経平均株価), more commonly called the Nikkei.

The Nikkei Stock Average is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange.

Moreover, The Stock Average was first published on May 16, 1949, where the average price was ¥176.21 with a divisor of 225.

It has been calculated daily by the Nihon Keizai Shinbun (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.

History of Nikkei

  • It began to be calculated on 7 September 1950.
  • 68 years ago, 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.

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.

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”).

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.

Annual returns

Nikkei 225 annual returns
year returns
1997 −21.19%
1998 −9.29%
1999 +36.79%
2000 −27.19%
2001 −23.52%
2002 −18.63%
2003 +24.45%
2004 +7.61%
2005 +40.24%
2006 +6.92%
2007 −11.13%
2008 −42.12%
2009 +19.04%
2010 −3.01%
2011 −17.34%
2012 +22.94%
2013 +56.72%
2014 +7.12%
2015 +9.07%
2016 +0.42%
2017 +19.10%

 

Nikkei Inc.

Formally known as The Nihon Keizai Shinbun (日本経済新聞Japan Economics Newspaper), is Nikkei, Inc.’s flagship publication and the world’s largest financial newspaper, with a daily circulation exceeding three million.

The Nikkei 225, a stock market index for the Tokyo Stock Exchange, has been calculated by the newspaper since 1950.

Moreover, Nikkei Inc. specializes in publishing financial, business and industry news. Its main news publications include:

  • Nikkei Asian Review, an English-language business journal that launched in November 2013.
  • Nikkei Veritas (日経ヴェリタス), a weekly financial newspaper that replaced Nikkei Kinyu Shimbun (Nikkei Financial Daily) in March 2008.
  • Nihon Keizai Shimbun (日本経済新聞), a leading economic newspaper.
  • Nikkei Business Daily (日経産業新聞 Nikkei Sangyo Shimbun), an industry newspaper
  • Nikkei Weekly (日経ウィークリー), an English-language business newspaper

The company sells these newspapers around the world, in their original languages and in translation.

Also, It makes many of its Japanese articles available in English through wire services, an English language website, and a licensing agreement with LexisNexis.

However, in Japan the price of the newspaper Morning edition is 160 yen.

The Afternoon edition is 70 yen and subscription is 4,509 yen/month (Morning and afternoon edition).

Nikkei agreed on 23 July 2015 to buy the UK-based FT Group, which includes business daily Financial Times, for the equivalent of $1.32 billion from Pearson PLC.

On 30 November 2015, Nikkei completed acquisition of Financial Times from Pearson plc.

Nikkei also owns TV Tokyo and Nikkei CNBC, which provides coverage of the Japanese market during trading hours and rebroadcasts CNBC during off-hours and weekends.

According to Wikipedia 

Read about other stocks and index:

Hassan Hadaoui
Hassan Hadaoui
Writer and Economist
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