The JP225, also known as Nikkei 225 or Nikkei Stock Average, is a stock market index for the Tokyo Stock Exchange (TSE). It is a price-weighted index operating in the Japanese Yen, and its components are reviewed once a year. The JP225 measures the performance of 225 of the largest publicly owned companies in Japan from various sectors.
The JP225 is moved by the share price of its constituent companies, and some of the most influential drivers may be the currency prices, the economic data, natural disasters and the Central Bank policies. The strength of the Japanese Yen or political/economic events can impact the Index simultaneously. Japan's natural disasters, such as the 2011 Tohoku earthquake and tsunami, prompted a huge selloff, and the Index dropped more than 7% in the days following. As for Central Bank Policies, it is clear that can affect the Index from borrowing costs and spending patterns by businesses and consumers in Japan.
The JP225 started in 1950 when the average price of its component stocks was 176.21 yen. Since 2010, the JP225 has been updated every 15 seconds during trading sessions. The JP225 was introduced at Singapore Stock Exchange in 1986, the Osaka Securities Exchange in 1988, Chicago Mercantile Exchange in 1990 and is now an internationally recognised futures index.
