Nikkei 225 index definition

The Nikkei 225 index is Japan's leading stock-market benchmark. It tracks 225 major Japanese companies on the Tokyo Stock Exchange.

The Nikkei 225 is price-weighted, so higher-priced stocks move it more than lower-priced ones, the same structure as the Dow Jones Industrial Average rather than a market-capitalisation-weighted index.

Traders read the Nikkei 225 for Japanese market sentiment, and it moves on corporate earnings, yen movements, Bank of Japan policy, global risk appetite, and Japan's economy. Exposure comes through index funds, exchange-traded funds, futures, options, or CFDs linked to it.

Nikkei 225 index Example

You follow the Nikkei 225 for Japanese stocks.

If major Japanese blue chips rise, the index moves higher. If the yen strengthens sharply or global risk sentiment weakens, it can fall, because a stronger yen pressures Japan's big exporters.