Primary equity index

Nikkei 225

The Nikkei Stock Average (Nikkei Average) is Japan's most widely watched stock index. It has roots going back to 1950. Nihon Keizai Shimbun, Inc. has calculated and announced the average since 1971. The current calculation method, based on the Dow Jones method, was first used in September 1950. The Tokyo Stock Exchange calculated the average at that time and retroactively calculated it back to May 1949, when the exchange reopened. This is the longest running stock price index in Japan's history. The components of the Nikkei Stock Average are 225 actively traded issues of the TSE first section. Taken together, the 225 issues reflect current market trends. Since October 1991, components have been checked every year and those of relatively low liquidity have been replaced by issues of high liquidity.

 

 

The Nikkei was up 19.3 percent in the first quarter of 2013 after gaining 22.9 percent for the year 2012 as the yen continued to decline in value. The depreciating yen helps exporters' sales abroad and at the same time boosts repatriated profits. This in turn lifts the stock market. The index continued to climb and was up 5.7 percent in the third quarter. The Nikkei's fourth quarter gain was 12.7 percent. For the year 2013, the index soared 56.7 percent.

 

The Nikkei gave back some of its 2013 gains. The index retreated for the first three months of the year. The Nikkei lost 8.5 percent in January and 0.5 percent in February. In March, it edged down 0.1 percent. The Nikkei was up 2.3 percent in May for its first monthly gain in 2014. In June, the index added 3.6 percent. The index was up 3.0 percent in July but retreated 1.3 percent in August. It rebounded in September with a 4.9 percent gain, thanks mainly to the decline of the yen. The yen's fall boosted exporters who rely on the currency's value for competitiveness in overseas markets and repatriated profits. It added another 1.5 percent in October. The index jumped 6.4 percent in November but was virtually unchanged in December. For the year, the Nikkei added 7.1 percent.

 

In January 2015, the Nikkei continued to climb — this time 1.3 percent. In February the index added 6.4 percent on the weakening yen while in March it was up 2.2 percent and in April, 1.6 percent. In April, the Nikkei climbed to a fifteen year high, over 20,000. However, it was not able to hold onto that level at the end of the month. In May the index was up 1.6 percent and was the only index tracked here to gain in all five months of 2015. The Nikkei declined 1.6 percent in June — this was its first monthly drop in 2015.