What is the Nikkei 225 index?

Usually just simply referred to as the Nikkei, this is the flagship stock market index of Japan. It tracks 225 top blue-chip companies listed on the Tokyo Stock Exchange from a range of industries.

Where have you heard about the Nikkei 225 index?

You’ll always see the value of the Nikkei included in round-ups of the day's trading on the financial markets. It’s widely regarded as one of the key indicators of stock market activity in Asia, along with the Hang Seng.

What you need to know about the Nikkei 225 index.

The Nikkei features a host of household names, many of them electronics and car giants, including Sony, Fuji, Toshiba, Mitsubishi and Honda. All of the stocks are highly liquid and are selected by considering the weights of the industrial sectors.

Launched in 1950, it’s a price weighted index, which means higher-priced stocks have more influence over the index’s performance than lower-priced ones. It is equivalent to the Dow Jones Industrial Average Index in the United States.

Like other indices, it’s affected by natural disasters. On March 15 2011, just after the devastating earthquake struck to the north-east of Tokyo, the index plummeted by more than 10% in a day.

Find out more about the Nikkei 225 index.

Read our definitions of FTSE 100 and Dow Jones to learn more about the leading stock market indices.