Review of the Japanese stock index Nikkei 225 - online Nikkei 225 futures rate chart, calculation features and formulas, index composition, trading hours, price forecast, technical and fundamental analysis and index funds. Online chart of the Nikkei 225 index, quotes change in real time. Indicators and tools for graphical analysis make it easier to predict the future behavior of the index. Nikkei 225 (or sometimes Japan 225) is one of Japan's major stock indexes, its quotes are influenced by the value of securities of the 225 largest Japanese companies listed on the TSE (Tokyo Stock Exchange). It is focused on the real sector of the economy, and due to the peculiarity of the calculation methodology, Nikkei 225 is called the Nikkei Stock Average.
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Technical Analysis Nikkei 225 Index
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About Nikkei 225 Index
Nikkei 225 is an indicative non-trading instrument. But regular and mini futures contracts, options and ETFs are available on it. In Japan, futures are available on the Osaka Exchange, available here:- "big" contracts of ¥1,000 x Nikkei 225, minimum price change of ¥10 per tick (¥10,000 for a full contract). Trading has been conducted since September 3, 1988
- mini futures are available from July 18, 2006. Contract size is ¥100 x Nikkei 225, minimum price change of ¥500 per futures.
Osaka Exchange trades from 08:45 to 15:15, after which there is a break and work resumes at 16:30, continuing until 05:30 local time (GMT+09:00, no daylight saving time). This schedule applies to both regular and mini contracts.
Futures and options contracts for the Nikkei 225 index are traded on the US, Brazilian and Singapore exchanges.
Overview of the Nikkei 225 Index
The index provider is the Japanese edition of Nihon Keizai Shimbun, the history of the Nikkei 225 began with the appearance of the column "Company Value" in the newspaper. This happened on September 7, 1950, taking into account the accepted methodology for calculating the index values were recalculated up to May 16, 1949. This date was linked with the opening of the Tokyo Stock Exchange, 4 days before that, Japan stopped paying reparations assigned following the results of World War II. At that time, the index was called TSE adjusted average price.From May 1975 to May 1985, the index received the right to officially use the prefix Dow in the name. During this period, it was called TSE (Tokyo Stock Exchange) Dow or Nikkei Dow.
The Nikkei 225 is similar to its competitor, the TOPIX index. The difference between them is that the structure of Nikkei 225 includes 225 largest companies from the first section, and TOPIX is calculated taking into account the share prices of all companies from the first section.
The capitalization of the Nikkei 225 index is estimated at trillions of dollars and is slightly less than 60% of the capitalization of all companies included in the first section of the Tokyo Stock Exchange.
When predicting the price of the Nikkei 225, consider the following:
Strong dependence on the Chinese economy and the state of the economy of the Asian region as a whole. China is in second place in the ranking of Japan's trading partners, it hosts a number of production facilities of Japanese companies.
The financial condition of the zaibatsu (the Japanese name for financial and industrial groups). There are companies in the index that can single-handedly bring down quotes or provoke their growth.
Relations between Japan and the United States in the sphere of trade. The United States is Japan's main trading partner, and a decrease in trade between the countries will reduce the Nikkei 225 Index quotes.
The exchange rate of the national currency of Japan. A strong yen makes Japanese exports less competitive, which negatively affects the Nikkei 225 quotes.
Composition of the Nikkei 225 index
A study of the composition of the Nikkei 225 index shows that it focuses on the real sector of the economy. The leading positions are occupied by the technology sector (over 40%) and the consumer sector (over 20%). The total "weight" of these sectors of the Japanese economy exceeds 60% in the structure.Of the 225 company stocks included in the index, 57 represent the technology sector. Another 59 are provided by the raw materials sector (companies whose activities are related to the search, extraction and processing of natural resources).
In terms of individual companies, Fast Retailing Co., Ltd. is in the lead. with an indicator of about 10%. This is followed by Softbank Group Corp., Tokyo Electron Ltd, Fanuc Corp., the combined weight of listed companies exceeds 20%. The price of the Nikkei 225 is highly dependent on the share prices of listed companies.
The composition of the index is reviewed annually. The current version of the rules for adjusting the composition of the basket was adopted on April 15, 2000.
The procedure for revising the composition of the Nikkei 225 index is as follows:
Stocks are valued based on trading volume and volume volatility. The last ratio is calculated as the ratio of the highest price to the lowest price, this number is then divided by the trading volume.
According to the above indicators, a pool of "highly liquid securities" is formed, 450 shares traded in the first section of the Tokyo Stock Exchange are selected into it. Next, the top 75 stocks of non-Nikkei 225 stocks are selected.
Companies belonging to different sectors are taken into account (there are 6 in total). The previously selected 450 companies are divided into sectors, then the number of shares in each sector is divided by 2 and the resulting number is considered the benchmark for the corresponding sector. Then the current number of companies in each sector is compared with the benchmark, if it is less, new companies are added (with maximum liquidity). If there are more companies in the sector than the calculations allow, then shares are excluded (papers with minimal liquidity are removed).
The final decision is made by a special committee.
An emergency revision of the composition of the index occurs when the shares are excluded from the first list of the Tokyo Stock Exchange. If securities are assigned the status of "under supervision", then they remain in the Nikkei 225, but can be excluded from its composition by special decision of the committee.
Calculation of the Nikkei 225 index
The calculation started on September 7, 1950, and the index quotes were also recalculated until May 16, 1949. The base value of Nikkei 225 is assumed to be 100 points.From 1985 to the end of 2009, the calculation was carried out every minute, until July 14, 2017, every 15 seconds. Since July 18, Nikkei 225 quotes have been updated every 5 seconds during the trading session of the Tokyo Stock Exchange.
The calculation is carried out in 2 stages, first, the adjusted value of each share from the index is determined, taking into account the nominal value. Shares of Japanese companies do not have such a thing as a par value after the adoption of the law in 2001. At the same time, the value of securities was formed based on the initial value of 50, 500 or 50,000 yen (ex-par value).
As a result, shares that can be bought one at a time have a value of tens of thousands of yen, and securities for which a lot includes 100 or 1000 shares have a much lower value. It is impossible to use exchange prices directly, a correction is being made:
Adj. Price (N) = Price (N) x 50/ex-par value
then the ratio of the sum of the adjusted values to the divisor is calculated and the index value is obtained.
Nikkei 225 = Sum (all Adj. Prices)/Divisor
The divisor is calculated taking into account the issue of additional shares, revision of the basket, change in the number of securities in free float.
Nikkei 225 index family
- Total Return - the same Nikkei 225, but taking into account the reinvestment of dividends.
- Covered Call strategy - the index measures the effectiveness of the Covered Call strategy in relation to Nikkei 225.
- Risk Control - modification of the underlying index with controlled volatility.
- Inverse version - a mirror instrument in relation to the Nikkei 225, there is an Inverse version with a leverage of 1 to 2.
- Hedged (USD, EUR) - shows the performance of Nikkei 225 in terms of hedging currency risks for non-Japanese investors.
- Volatility Index - reflects the expected volatility of the Nikkei 225.
- Dividend Point - takes into account the accumulation of dividends for the year.
ETF
This index replicates a relatively small number of ETFs. The most famous- iShares Core Nikkei 225
- NEXT FUNDS Nikkei 225 Leveraged
- Simplex Nikkei 225 Bull 2x
ETF is a long-term investment option. Inverse ETFs allow you to make money on a falling index.
For the Nikkei index, the trends are long periods of growth and equally rapid declines. The historical maximum, set at the end of 1989, remains unattainable so far. The index makes it possible to earn both on growth and on a fall; derivative trading instruments created on its basis are also suitable for long-term investments.