Primary equities market

Tokyo Stock Exchange

The Tokyo Stock Exchange was established in May 1878. After a war time interruption, trading was resumed by unofficial group transactions in December of 1945. The Securities and Exchange Law was enacted in March of 1947, and entirely revised in April of 1948. On April 1, 1949, stock exchanges were established in Tokyo as well as other main Japanese cities. Trading on these exchanges began in May.

Primary equity indexes

Nikkei 225 and Topix

The Nikkei Stock Average (Nikkei Average) is Japan's most widely watched stock index. It has roots going back to 1950. Nihon Keizai Shimbun, Inc. has calculated and announced the average since 1971. The current calculation method, based on the Dow Jones method, was first used in September 1950. The Tokyo Stock Exchange calculated the average at that time and retroactively calculated it back to May 1949, when the exchange reopened. This is the longest-running stock price index in Japan's history. The components of the Nikkei Stock Average are 225 actively traded issues of the TSE first section. Taken together, the 225 issues reflect current market trends. Since October 1991, components have been checked every year and those of relatively low liquidity have been replaced by issues of high liquidity.

Including all First Section listed shares, Topix provides a more comprehensive measure of stock price changes than other indices based on stock samples The Topix is a weighted index, the market price of each component stock is multiplied by the number of shares listed. Accordingly, a price change in a stock exerts influence on the index in proportion to its relative market importance. In other words, a price change in a large, widely held stock has a greater impact on Topix than that of a less widely held stock.

Both the Nikkei and Topix are down after 11 months of 2007 by 9 percent and 8.9 percent respectively. In November, the Nikkei lost 6.3 percent while the Topix declined 5.4 percent.