The Nikkei 225 tracks 225 large companies listed on the Tokyo Stock Exchange. Like the Dow, it is price weighted, so a few companies with very high share prices carry a large share of the index. Its biggest influences are the yen, global demand for Japanese exports and Bank of Japan policy. In February 2024 it finally passed its December 1989 record high of 38,915.
Key takeaways
- The Nikkei is published by the Nikkei newspaper group and has been calculated since 1950.
- Price weighting means companies with high share prices, rather than the largest companies, dominate.
- A weaker yen tends to lift the index because exporters earn more in yen.
- On 5 August 2024 the Nikkei fell 12.4% in one day, its largest fall since 1987, as yen-funded trades were unwound.
- Tokyo’s cash session runs 09:00–11:30 and 12:30–15:30 Tokyo time, which is 00:00–02:30 and 03:30–06:30 UTC all year.
| Tracks | Nikkei 225, Tokyo Stock Exchange Prime market |
|---|---|
| Constituents | 225 |
| Weighting | Price weighted, adjusted by a divisor |
| Calculated since | 1950 |
| Previous record | 38,915.87 on 29 December 1989, surpassed in February 2024 |
| Cash session (UTC) | 00:00–02:30 and 03:30–06:30 |
| Alternative benchmark | TOPIX, a value-weighted index of the whole Prime market |
| At Marketsall | Not currently offered; available index CFDs are listed on the Indices page |
What is the Nikkei 225?
The Nikkei is the oldest and most quoted Japanese index. Its 225 members are chosen from the Prime market to represent Japanese industry. Because the index is price weighted, a company whose share price is ten times higher than another’s has ten times the influence, whatever their sizes. A handful of high-priced stocks, led by the Uniqlo owner Fast Retailing, have at times made up a large share of the index. The same logic applies to the Dow, explained in how the Dow Jones is calculated.
Nikkei 225 vs TOPIX
| Feature | Nikkei 225 | TOPIX |
|---|---|---|
| Companies | 225 | Around 1,700 (Prime market) |
| Weighting | Share price | Free-float market value |
| Tilt | High-priced technology and retail names | Banks, industrials and the largest companies |
| Used for | Headlines, futures and CFDs | Institutional benchmarks, Bank of Japan ETF purchases historically |
| Behaviour | More volatile | Broader and steadier |
Why does a weaker yen lift the Nikkei?
Many Nikkei members, including carmakers, machinery makers and electronics firms, sell abroad and report in yen. When the yen weakens, their overseas revenue is worth more yen, which lifts profits and share prices. A weaker yen also tends to go with calm global markets. The reverse was seen in August 2024: as the yen surged and leveraged yen-funded positions were closed, the Nikkei fell 12.4% on 5 August, then rebounded by about 10% the next day. See the USD/JPY guide and why the yen is a safe haven.
What moves the Nikkei?
| Driver | How it tends to work | What to watch |
|---|---|---|
| The yen | A weaker yen generally supports exporters and the index. | USD/JPY guide |
| Bank of Japan policy | Rate rises tend to strengthen the yen and weigh on shares. | Bank of Japan decisions, currency intervention |
| US markets and technology | Japanese chip-equipment makers track global semiconductor demand; Wall Street’s close sets the tone for Tokyo’s open. | Nasdaq 100 guide |
| Corporate reform | Pressure on companies to raise returns and buy back shares has attracted foreign investors. | Tokyo Stock Exchange guidance, buyback announcements |
| Global risk appetite | Foreign investors own a large share of Japanese equities and move quickly. | risk-on vs risk-off |
When does the JP225 trade?
Tokyo extended its afternoon session by 30 minutes to 15:30 local time in November 2024. Nikkei futures trade in Osaka and in Singapore and Chicago for most of the day and night, and CFDs usually follow them, so the index reacts to European and US news long after Tokyo has closed. See index CFD trading hours and global market trading hours.
What it costs to trade the Nikkei 225 (JP225) as a CFD
A JP225 CFD tracks the Nikkei 225; no shares are owned. It may be quoted in yen or in dollars depending on the provider. See what a CFD is.
| Cost | When it applies | Note for the Nikkei 225 (JP225) |
|---|---|---|
| Spread | Every trade, at entry | Tightest in Tokyo hours; wider in European and late US hours |
| Commission | Depends on instrument and account type | Varies by provider |
| Swap / overnight financing | Positions held past the daily rollover | Charged daily on positions held past the rollover. |
| Dividend adjustment | Cash-based index CFDs, when constituent shares go ex-dividend | Long positions are typically credited and short positions debited, so that the index’s fall on the ex-dividend date creates no profit or loss. |
| Contract rollover | Only if the CFD is based on a futures contract | The price adjusts when the underlying contract changes. |
| Slippage | Fast markets, gaps, news | Most likely at the Tokyo open, on yen moves and on Bank of Japan days |
Key risks
Yen shocks. Sudden yen strength can hit the index hard, as August 2024 showed.
Concentration. A few high-priced stocks carry a large share of the index.
Out-of-hours pricing. Most of the day the CFD is priced from futures while Tokyo is closed. See gap risk.
Currency of the contract. If the CFD is quoted in yen, your profit or loss also depends on the exchange rate.
Risk warning. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, the products offered on this website may not be suitable for all investors because of the risk of losing all of your invested capital. You should never invest money that you cannot afford to lose, and never trade with borrowed money.
Is the Nikkei 225 available at Marketsall?
The Nikkei 225 (JP225) is not currently offered at Marketsall. The index CFDs available on MetaTrader 5 and Web Trader are listed, with live prices, on the Indices page.
Frequently asked questions
What is the Nikkei 225?
The Nikkei 225 is Japan’s best-known stock index, tracking 225 large companies listed on the Tokyo Stock Exchange. It is price weighted, like the Dow Jones, so companies with higher share prices have more influence.
Why does a weaker yen help Japanese stocks?
Many Nikkei companies export and earn revenue in other currencies. When the yen weakens, those earnings are worth more in yen, raising reported profits. A weaker yen also tends to coincide with calm global markets, which supports shares.
What happened to the Nikkei on 5 August 2024?
The Nikkei 225 fell 12.4% in a single day, its largest one-day drop since October 1987. The yen had strengthened sharply after a Bank of Japan rate rise and weak US data, and investors closed leveraged positions funded in yen. The index rebounded by about 10% the next day.
What is the difference between the Nikkei 225 and TOPIX?
The Nikkei 225 holds 225 stocks and is weighted by share price. TOPIX covers the whole Prime market, around 1,700 stocks, and is weighted by market value. TOPIX is the broader measure; the Nikkei is the more quoted and more volatile one.
What time does the Tokyo stock market open?
The Tokyo Stock Exchange trades from 09:00 to 11:30 and from 12:30 to 15:30 Tokyo time, which is 00:00 to 02:30 and 03:30 to 06:30 UTC. Japan does not use daylight saving time, so these UTC times apply all year.
Related reading
Confirm the JP225 quote currency
Whether JP225 is priced in yen or dollars changes what each point is worth, so read its specification, which how to read contract specifications on MT5 explains. Bank of Japan decisions can jolt the yen and the index together; find the next one on the economic calendar.
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