The Nikkei is a stock index for the Tokyo Stock Exchange where the price-weighted average of the 225 top companies in Japan are listed.

    It is a reflection of the overall market in Japan and does not weigh any particular industry above another. It is Asia’s most traded and therefore most significant index.

    The Nikkei, official name the Nikkei 225, was first published in 1950 by the Tokyo Stock Exchange. The Nikkei has been maintained by the economic newspaper Nihon Keizai Shimbun since 1971, from which the name is derived.

    The Nikkei is a yen price-weighted average index based on a par value of ¥50. This means that a price change in any one stock will affect the average the same way, regardless of whether the stock is priced at ¥5 or ¥500.

    The composition of the Nikkei is reviewed every September and the changes are published in October. To keep the system working, the market capitalisation of each stock used in the calculation of the index has to be redefined so each participant has equal weight. Therefore, removing or adding companies might affect the weighting of other stocks.