Nikkei 225
Japan's most widely cited stock index, tracking 225 large, established companies listed on the Tokyo Stock Exchange.
Operator
Nikkei Inc.
Launched
1950
Country
Japan
Methodology
Price-weighted, similar in spirit to the Dow Jones Industrial Average.
How Investors Use This Index
Like the Dow Jones Industrial Average, the Nikkei 225 is price-weighted rather than weighted by market capitalization, so higher-priced shares influence the index more than the size of the underlying company would suggest. The index is also a widely cited case study in market history: after peaking during Japan's asset-price bubble in 1989, it took decades for the Nikkei to reclaim that earlier high, a reminder that even a major developed-market index can take a generation to fully recover from an extreme valuation peak.
Major Sectors
Frequently Asked Questions
Why did it take so long for the Nikkei to recover its 1989 high?
Japan's asset bubble collapse was followed by decades of deflation, weak domestic demand, and corporate deleveraging — a slower-motion unwind than most Western market crashes.
Is the Nikkei price-weighted like the Dow?
Yes, both use price-weighting rather than market-cap weighting, making them outliers among major global indexes.
How does the yen affect the Nikkei?
A weaker yen generally benefits Nikkei-listed exporters by increasing the yen value of overseas earnings; a stronger yen tends to compress those earnings.
What sectors dominate the Nikkei 225?
Automotive, industrial machinery, electronics, and increasingly semiconductor-equipment manufacturers tied to global chip supply chains.