Review of the Japanese stock index TOPIX - Online rate chart, calculation features and formulas, composition of the index basket, trading hours and index funds. The TOPIX index (Tokyo Stock Price Index) is one of the main stock indices in Japan, calculated by the Tokyo Stock Exchange (TSE). The calculation base includes securities of Japanese companies with large capitalization that are listed on the site and belong to the shares of the first segment. TOPIX heads a family consisting of 33 industry and a number of other subindices.
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About TOPIX
The TOPIX index (Tokyo Stock Price Index) is one of the main stock indices in Japan, calculated by the Tokyo Stock Exchange (TSE). The calculation base includes securities of Japanese companies with large capitalization that are listed on the site and belong to the shares of the first segment. TOPIX heads a family consisting of 33 industry and a number of other subindices.TOPIX Trading Hours
Tokyo Stock Price Index futures are traded on several of the world's largest exchanges. In Japan, contracts have been traded on the Tokyo Stock Exchange since September 1988. Futures are settled and traded from 08:45 to 05:30 the next day local time (GMT+ 09:00) with a break from 15:15 to 16:30.The contract size corresponds to the size of the TOPIX online index multiplied by 10,000 Japanese yen. The minimum price fluctuation is 0.5 index points or 5,000 yen per contract.
Mini futures for the TOPIX Index are also traded on the Tokyo Exchange. Such contracts appeared on the site in June 2008. They are traded at the same time as standard futures. The contract size corresponds to the TOPIX rate multiplied by 1000 Japanese yen. The minimum price change is 0.25 points.
TOPIX contracts are also traded on the Chicago Mercantile Exchange (CME). On the Globex CME platform, futures are assigned the trading code TPY. Trading takes place between 5:00 pm and 4:00 pm the next day, Chicago time (CT). The contract value is equal to the TOPIX index value multiplied by 5,000 Japanese yen. The minimum price change is 0.5 points or 2,500 yen per contract.
Another platform where TOPIX index futures are traded is the Taiwan Futures Exchange (TAIFEX), where they are assigned the ticker TJF. Contract quotes are calculated in Taiwanese dollars. Trading takes place from 08:00 to 16:15 local time (GMT+08:00). The contract size corresponds to the TOPIX index value multiplied by NT$200. Futures belong to the settlement group. The minimum price change is 0.25 index points or NT$50 per contract.
The Tokyo Stock Price Index chart is characterized by low volatility: its value changes by an average of 0.5%-2% per trading day, which makes the asset comfortable for long-term investments. At the same time, the liquidity of its futures can be called quite significant, which allows making short-term transactions with them.
The main factor influencing the dynamics of TOPIX is the development of the Japanese market, for which the index is a key indicator. It can also be significantly influenced by the global economic situation and Japan's international relations.
TOPIX Index
Tokyo Stock Price Index is a Japanese stock index that reflects the dynamics of large capitalization companies traded on the Tokyo Stock Exchange. Calculation of the indicator began on July 1, 1969. The base date for the index was January 4, 1968, and the base level was 100 points. The TOPIX calculation base includes all ordinary shares traded in the first segment of the TSE.The composition of the index is reviewed twice a year: in January, new shares may be added to it or existing ones may be excluded. In July, only the composition of the indicator can be replenished.
TOPIX is a capitalization-weighted index, but only publicly traded stocks are taken into account in its calculation. This significantly affects the balance of its composition, since many Japanese companies retain large stakes in their business partners to strengthen business alliances. Such groups in Japan are called keiretsu.
Composition of the TOPIX index
The Tokyo Stock Price Index (TOPIX) includes all large-capitalization stocks on the Tokyo Stock Exchange. The total number of issuers in the index basket exceeds 2000.TOPIX is widely diversified across industries. The largest share in its capitalization is occupied by shares of companies producing consumer electronics, followed by issuers from the sectors of communications, production of transport equipment, chemical industry, banking, machinery production, retail trade, service, wholesale trade, pharmaceuticals, food industry, land transportation , construction and others.
The largest Japanese issuers in the calculation of the TOPIX index are:
- Toyota Motor Corporation (TSE: 7203);
- Sony Corporation (TSE: 6758);
- Keyence Corporation (TSE: 6861);
- SoftBank Group Corp. (TSE: 9984);
- Takeda Pharmaceutical Company Limited (TSE: 4502);
- Nippon Telegraph and Telephone Corporation (TSE: 9432);
- Mitsubishi UFJ Financial Group Inc. (TSE: 8306);
- Daiichi Sankyo Co., Ltd. (TSE: 4568);
- Nintendo Co., Ltd. (TSE: 7974);
- Recruit Holdings Co., Ltd. (TSE: 6098);
- KDDI Corporation (TSE: 9433);
- Honda Motor Co., Ltd. (TSE: 7267).
TOPIX calculation methods
TOPIX is a market capitalization weighted index. The indicator value is calculated as the ratio of the current market value to the base value, multiplied by a basis point. The following formula is used for calculation:
Designations:
- CMV – current market value of shares in free float;
- BMV is the basic market value of shares in free float.
Current Market Value = ∑ (Number of shares of each issuer × Issuer's share price)
TOPIX includes several dozen indices, such as:
- TOPIX Small - is an index reflecting the health of Japanese small-cap companies.
- TOPIX Foods - is an industry index that includes securities of food sector enterprises.
- TOPIX Core 30 - is an indicator of blue chips in the Japanese market, which includes shares of the 30 largest and most liquid issuers listed on the TSE.
- TOPIX Metal Products - is an industry index reflecting the state of metallurgical companies in Japan.
- TOPIX Large 70 - is an index of the 70 largest companies on the Tokyo Stock Exchange that are not included in TOPIX
- TOPIX 100 - is a general indicator that includes all components of the TOPIX Core 30 and TOPIX Large indices
- TOPIX Pharmaceutica - is an industry index of pharmaceutical companies in the Japanese market.
- TOPIX Mid 400 – the indicator includes shares of 400 mid-cap companies listed on the Tokyo Stock Exchange that are not included in the TOPIX calculation base
- TOPIX Land Transportation - is an industry index that includes shares of issuers from the land transportation sector.
- TOPIX Marine Transportation - is an index of Japanese companies in the maritime transportation industry.
- TOPIX 500 - is a combined indicator that includes 500 components included in TOPIX 100 and TOPIX Mid 400.
- TOPIX Retail Trade - is an industry indicator of the Japanese retail trade market.
- The TOPIX 1000 - is a composite index that includes all components of the TOPIX 500 and the 500 largest issuers of the TOPIX Small.
- TOPIX Chemicals - is a TOPIX subindex that reflects the state of Japanese companies in the chemical industry.
- TOPIX Banks - is an indicator of the Japanese banking sector.
TOPIX ETF
Another option for investing in the TOPIX index is exchange-traded funds that follow its quotes. Among the most famous ETFs on the Tokyo Stock Price Index are:- iShares Core TOPIX ETF (TSE: 1475);
- Daiwa ETF-TOPIX (TSE: 1305);
- TOPIX ETF (TSE: 1306);
- TOPIX Listed Index Fund TOPIX (TSE: 1308);
- MAXIS TOPIX ETF (TSE: 1348);
- DIAM ETF TOPIX (TSE: 1473).
TOPIX is one of the key global indices, very popular among traders. Its moderate volatility makes it a convenient asset for long-term investment, while high liquidity and a wide variety of related financial instruments allow you to profit from trading it using almost any strategy.