Your guide to trading Nikkei 225 (Japan 225)

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Why is the Nikkei 225 index important to traders?

Commonly referred to as the Nikkei 225 Stock Average, the Japan 225 embraces the largest and most liquid stocks traded on the Tokyo Stock Exchange (TSE). Established in 1950, the Nikkei 225 serves as a national benchmark index and the major indicator of the Japanese stock market performance.

Also known as the “Nikkei Dow Jones Stock Average”, the Japan 225 is the most often quoted index for Japanese stocks. Reviewed once a year at the beginning of October, the Nikkei is comprised of 225 domestic companies, representing different industry sectors, including: technology; consumer goods; financials; capital goods; materials; transportation; utilities and others.

Traders like to follow the Japan 225 index because it can offer exposure to substantial market price volatility and significant day-to-day fluctuations. It serves as the underlying asset for a wide range of derivative financial instruments. The Nikkei 225 index is known for its volume and volatility compared to the other major indices, and attracts numerous day traders trying to profit from short-term price movements.

Japan 225

Japan 225 trading hours

The Nikkei companies are all listed on the Tokyo Stock Exchange (TSE), the major Japanese stock exchange that follows a typical Monday to Friday schedule. The main trading hours for the Japan 225 index are between 9:00 – 11.30, and 12:30 – 15:00 (GMT+09:00) 5 trading days a week.

If you choose to trade CFDs, you can follow the Nikkei 225 prices live in JPY with the comprehensive Japan 225 index price chart on Capital.com:

  • Monday to Thursday, 00:00 – 22:00 and 23.01 – 00.00
  • Friday, 00.00 – 22.00
  • Sunday, 23.01 – 00.00 

How is the Nikkei 225 calculated?

Like the world’s most popular Dow Jones Industrial Average, the Japan 225 is a price-weighted index, meaning stocks with higher share prices are given a greater weight in the index. 

The Nikkei 225 is calculated in real-time at 5-second intervals during the trading hours of the Tokyo Stock Exchange (TSE). 
The index is calculated as a weighted price average, where the sum of the constituent stock prices adjusted by the presumed par value, is divided by the divisor. 

Nikkei Stock Average = the sum of adjusted stock price / divisor

The method of using a divisor is called “Dow adjustment”. The divisor is used to maintain the index continuity by eliminating external influences not related directly to the market movement. 

The Nikkei 225 constituents are reviewed once a year at the beginning of October. The major criteria considered during the review are liquidity in the market and sector balance. 

How to trade Nikkei 225 CFD

The Nikkei 225 is a way to gain exposure to the Japanese stock market without having to analyse the performance of individual companies. The Japanese Nikkei 225 index typically provides traders with a high degree of liquidity, long trading hours and tight spreads. 

One of the easiest and most popular ways to trade the Nikkei 225 index is with CFDs (contracts for difference). A contract for difference (CFD) is a type of contract between a trader and a broker in order to try and profit from the price difference between opening and closing the trade.

Trade Japan 225 - J225 CFD

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Using CFDs to trade Nikkei 225 will allow you to go long or short the market without having to deal with conventional exchanges. You trade direct with your CFD broker. 

No matter whether you have a positive or negative view of the Japan 225 forecast and predictions, you can try to profit from either the upward or downward future price movements. 

The index has good volume and volatility as it is made up of a wide cross-section of liquid trading instruments, making the Nikkei 225 popular with CFD traders around the world.

Trade CFDs on Nikkei 225 with Capital.com. Sign up at Capital.com to use our desktop platform, or download our mobile app to start trading on the most popular global markets anywhere, anytime. 

Why trade Nikkei Index CFDs with Capital.com

Advanced AI technology at its core: A Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative SmartFeed offers a range of materials to put him back on the right track. The neural network analyses in-app behaviour and recommends videos and articles to help polish your investment strategy. This hopefully helps you refine your approach when you trade Japan 225 index.

Trading on margin: Providing trading on margin (20:1 for major indices), Capital.com gives you access to the Nikkei 225 index with the help of CFDs.

Trading the difference: By trading CFDs on the Nikkei 225 index, you don’t buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of its price. CFD trading is no different from traditional trading in terms of its associated strategies. A CFD investor can go short or long, set stop and limit orders and apply trading scenarios that align with his or her objectives. So whether your view is positive or negative, you can trade Nikkei 225 in both directions.

All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.

Focus on safety: Captal.com puts a special emphasis on safety. Licensed by CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.

Nikkei 225 historical data

Maintained and regulated by Nikkei, Inc. the Japan 225 Index was first published in its current form on 7 September 1950. 

Historically, the Japan 225 Stock Index reached an all-time high of 38,915.87 in December 1989. The Nikkei’s record low of 85.25 happened in July 1950.

The list of other milestone dates for the Japan’s major financial index include the following:


On Tuesday, 13 November 2018, the Nikkei 225 decreased 459 points or 2.06% down to 21,811 from 22270 in the previous trading session. To follow the most recent ups and downs of the Nikkei 225 index, check out our live Nikkei 225 Index (J225) price chart.

FAQ
 

Though the Nikkei 225 is the most frequently quoted index for the Japanese stock market, there are a number of other popular related indices.

These include:

  • Nikkei Asia300
  • JPX-Nikkei index 400
  • Nikkei Stock index 300
  • Nikkei 500 Stock Average
  • Nikkei JAPAN 1000
  • Nikkei JASDAQ Stock Average
  • Nikkei All Stock Index

 

The Tokyo Stock Price Index (TOPIX) is another major index on the Tokyo Stock Exchange. Unlike the Nikkei 225, which is comprised of 225 selected stocks, TOPIX is calculated with all the stocks on the TSE using the market value weighted method. 


Since the Nikkei 225 is price weighted, it tends to be affected by high-price stocks, such as high-tech. TOPIX, on the other hand, is influenced by the stocks with large market value, such as financials. 
 


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