FAQ on Mutual Funds


About NIKKEI Stock Average

The NIKKEI Stock Average is Japan’s widely watched index of stock market activity and has been calculated continuously since September 7, 1950. (Before that date, the Tokyo Stock Exchange calculated the Tokyo Stock Exchange Adjusted Average Stock Price, so index-based measurement of the market actually goes back to May 16, 1949).

The current calculation method, called the Dow Jones method, has been used since 1950. The 225 components of the NIKKEI Stock Average are among the most actively traded issues on the first section of the TSE. The index reflects the ex-rights-adjusted average stock price.

Since the NIKKEI Stock Average is expected to represent the performance of stocks on the first section – and by extension the market in general – the mix of components has been rebalanced from time to time to assure that all issues in the index are both highly liquid and representative of Japan’s industrial structure.

The previous round of rule changes governing deletion and addition of components took place in October 1991. The revisions mandated replacement of issues whose trading volumes had declined considerably with high liquidity alternatives, with all an eye to maintaining a lanced representation by the various industrial sectors. Japan’s economic and industrial environment has changed rapidly over the past 10 years and activity in the stock market has reflected this.

In recent years, the pace of change has accelerated. Notably, an entirely new industry has emerged around information technology (IT). During this period of change, Japan has been suffering through a protracted recession characterized by sluggish capital investment and weak consumer spending.

The circumstances have resulted in a situation where lines are being clearly drawn between winners and losers, and these corporate strength differentials are driving a wave of mergers and acquisitions. A state of bi-polarization has thus come to shape the stock market.

In response to these, Nikkei in October 1993 introduced the Nikkei 300 (Nikkei Stock Average of 300 Selected Issues), a weighted average based on market capitalization of 300 components stocks. This was followed in June 1998 by the launch of Nikkei Style Indexes (Value and Growth), which was created to recognize diversification in asset management styles.

The Nikkei Stock Average has now come to play a much larger role than simply measuring the market level and reflecting trends. Use of the average as a base for futures and other index-linked derivatives, for example, is just one of a growing range of applications.

It was these changes in the industrial and investment environments that necessitated revisions to the rules covering selection (addition and deletion) of index components. The goal was to assure continuity of the basic philosophy of using “225 Selected Issues” to accurately represent Japan’s economic conditions.

Nikkei’s Calculation Method:

The Nikkei Stock Average is the average price of 225 stocks traded on the first section of the Tokyo Stock Exchange, but it is different from a simple average in that the divisor is adjusted to maintain continuity and reduce the effects of external factors not directly related to the market.


a) Stocks that do not have a par value of 50 yen are converted to 50 yen par value.

b) Numbers are rounded to two digits after the decimal point, or hundrethds, to calculate the average.

c) Priority in the usage of prices are:

  • Current Special Quotation (closing special quotation).
  • Current Price (Closing Price)
  • Standard Price, which is defined as the theoretical price of ex-rights, a special quotation from the previous day or the closing from the previous day, in this order of priority.

Adjustment of Divisors

When components change or when they are affected by changes outside of the market, the divisor is adjusted to keep the index level consistent.

In the case of ex-rights

Rights prices = last cum stock price – theoretical value of ex-rights.

Where there is no split or a reverse split, the split-allotment ratio shall be one.

In case of capital decrease:

In the case of replacement of components in the average

In the case of stock buyback by issuer

Divisor is not adjusted


Nikkei 225 Constituents:

The following are Nikkei 225’s constituents:

Company Name Company Name Company Name
Takara Holdings Inc. Kikkoman Corp. The Nisshin Oillio Group, Ltd.
Meiji Seika Kaisha Ltd. Kirin Brewery Co, Ltd. Meiji Dairies Corp.
Nippon Flour Mills Co., Ltd. Sapporo Holdings Ltd. Nisshin Seifun Group Inc.
Nichirei Corp. Morinaga Co., Ltd. Nippon Meat packers, Inc.
Ajinomoto Co., Inc. Japan Tobacco Inc. Asahi Breweries, Ltd.
Nisshinbo Industries, Inc. Nitto Boseki Co., Ltd. Teijin Ltd.
Toray Industries, Inc. Mitsubishi Rayon, Ltd. Kuraray Co., Ltd.
Unitika, Ltd. Toyobo Co., Ltd. Nippon Paper Group, Inc.
Oji Paper Co, Ltd. Hokuetsu Paper Mills, Ltd. Mitsubishi Paper Mills, Ltd.
Fuji Photo Film Co., Ltd. Shin-Etsu Chemicals Co., Ltd. Kao Corp.
Konica Minolta Holdings, Inc. Nissan Chemical Industries, Ltd. Sumitomo Chemicals co., Ltd.
Showa Denko K.K. Ube Industries, Ltd. Nippon Soda Co., Ltd.
Asahi Kasei Corp. Mitsubishi Chemicals Corp. Tosoh Corp.
Toagosei Co., Ltd. Denki Kagaku Kogyo K.K. Kyowa Hakko Kogyo Co., Ltd.
Mitsui Chemicals, Inc. Shiseido Co, Inc. Nippon Kayaku Co., Ltd.
Terumo Corp. Takeda Pharmaceutical Co., Ltd. Eisai Co., Ltd.
Astellas Pharma Inc. Shionogi Co., Ltd. Sankyo Co., Ltd.
Daiichi Pharmaceutical Co., Ltd. Dainippon Pharmaceutical Co., Ltd. Chugai Pharmaceutical Co., Ltd.
Showa Shell Sekiyu K.K. Nippon Mining Holdings, Inc. Nippon Oil Corp.
Bridgestone Corp. The Yokohoma Rubber Co., Ltd. NGK Insulators, Ltd.
Toto Ltd. Nippon Sheet Glass Co., Ltd. Tokai Carbon Co., Ltd.
Taiheiyo Cement Corp. Sumitomo Osaka Cement Co., Ltd. Asahi Glass Co., Ltd.
JFE Holdings, Inc. Nippon Steel Corp. Sumitomo Metal Industries
Kobe Steel, Ltd. Toyo Seikan Kaisha, Ltd. Sumitomo Electric Industries, Ltd.
Mitsui Mining and Smelting Co., Ltd. Sumitomo Metal Mining Co., Ltd. Fujikura Ltd.
The Furukawa Electric Co., Ltd. Dowa Mining Co., Ltd. Mitsubishi Materials Corp.
Nippon Light Metal Co., Ltd. Furukawa Co., Ltd. Toho Zinc Co., Ltd.
Koyo Seiko Co., Ltd. Okuma Corp. Ebara Corp.
Komatsu Ltd. Sumitomo Heavy Industries Ltd. NTN Corp.
Hitachi Zosen Corp. Chiyoda Corp. Mitsubishi Heavy Industries, Ltd.
The Japan Steel Works, Ltd. NSK Ltd. Daikin Industries, Ltd.
Kubota Corp. Advantest Corp. TDK Corp.
Kyocera Corp. Fanuc Ltd. Alps Electric Co., Ltd.
Taiyo Yuden Co., Ltd. Sony Corp. Denso Corp.
Pioneer Corp. Canon Inc. Matsushita Electric Industries co., Ltd.
Sharp Corp. Matsushita Electric Works, Ltd. Yokagawa Electric Corp.
Fuji Electric Holdings., Ltd. Fujitsu Ltd. Mitsumi Electric Co., Ltd.
Mitsubishi Electric Corp. Oki Electric Industry Co., Ltd. Casio Computer Co., Ltd.
Hitachi, Ltd. Toshiba Corp. NEC Corp.
Clarion Co., Ltd. GS Yuasa Corp. Minebea Co., Ltd.
Sanyo Electric Co., Ltd. Meidensha Corp. Mitsui Engineering Shipbuilding Co., Ltd.
Kawasaki Heavy Industries, Ltd. Ishikawajima – Harima Heavy Industries Co., Ltd. Toyota Motor Corp.
Honda Motor Co., Ltd Hino Motors, Ltd. Suzuki Motor Corp.
Nissan Motor Co., Ltd. Isuzu Motors, Ltd. Fuji Heavy Industries Ltd.
Mazda Motor Corp. Mitsuibishi Motors Corp. Topy Industries, Ltd.
Olympus Corp. Nikon Corp. Ricoh Co., Ltd.
Citizen Watch, Ltd. Yamaha Corp. Toppan Printing Co., Ltd.
Dai Nippon Printing Co., Ltd. Nippon Suisan Kaisha, Ltd. Teikoku Oil Co., Ltd.
Obayashi Corp. Shimizu Corp. Daiwa House Industry Co. Ltd.
Sekisui House, Ltd. Kajima Corp. JGC Corp.
Comsys Holdings Corp. Kumagai Gumi Co., Ltd. Taisei Corp.
Tokyo Electron Ltd. Mitsui Co., Ltd. Sumitomo Corp.
Sojitz Holdings Corp. Itochu Corp. Marubeni Corp.
Tomen Corp. Softbank Corp. Mitsuibishi Corp.
Isetan Co., Ltd. Ito-Yokado Co., Ltd. Seven-Eleven Japan Co., Ltd.
Mitsukoshi Ltd. Marui Co., Ltd. Takashimaya Co., Ltd.
Aeon Co., Ltd. Sumitomo Mitsui Financial Group Inc. The Sumitomo Trust and Banking Co., Ltd.
The Chiba Bank, Ltd. Mitsui Trust Holdings, Inc. Mizuho Trust Banking Co., Ltd.
UFJ Holdings, Inc. Mitsubishi Tokyo Financial Group, Inc. Mizuho Financial Group, Inc.
The Bank of Yokohama, Ltd. The Shizuoko Bank, Ltd. Resona Holdings, Inc.
Nomura Holdings Inc. Daiwa Securities Group Inc. Nikko Cordial Corp.
Shinko Securities Co. Ltd. Millea Holdings Inc. Mitsui Sumitomo Insurance Co., Ltd.
Sompo Japan Insurance Inc. Credit Saison Co. Ltd. Nippon Shinpan Co. Ltd.
Sumitomo Realty Development Co., Ltd. Heiwa Real Estate Co., Ltd. Mitsui Fudosan Co., Ltd.
Mitsubishi Estate Co., Ltd. East Japan Railway Co. West Japan Railway Co.
Odakyu Electric Railway Co. Ltd. Tobu Railway Co. Ltd. Keio Corp.
Tokyu Corp. Keisei Electric Railway Co. Ltd. Nippon Express Co. Ltd.
Yamato Transport Co. Ltd. Mitsui O.S.K. Lines Ltd. Kawasaki Kisen Kaisha Ltd.
Nippon Yusen K.K. Japan Airlines Corp. All Nippon Airways Co. Ltd.
Mitsubishi Logistics Corp. Nippon Telegraph and Telephone Corp. KDDI Corp.
NTT Data Corp. NTT DoCoMo, Inc. The Kansai Electric Power Co. Ltd.
The Tokyo Electric Power Co. Inc. Chubu Electric Power Co. Inc. Osaka Gas Co. Ltd.
Tokyo Gas Co. Ltd. Yahoo Japan Corp. CSK Corp.
Konami Corp. Trend Micro Inc. Toei Co. Ltd.
Tokyo Dome Corp. Secon Co. Ltd. Dentsu Inc.

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