The Tokyo Stock Price Index, commonly known as the Topix, tracks the performance of all domestic companies of the First Section of the Tokyo Stock Exchange (TSE), making it a comprehensive indicator of the overall health of the Japanese stock market. The index is calculated based on the market capitalisation of each company, providing a broad and diversified reflection of the Japanese economy across various sectors. Unlike the Nikkei 225, which is price-weighted and includes only the top 225 blue-chip companies, the Topix offers a more inclusive and detailed snapshot of Japan's corporate landscape.
For investors, both domestic and international, the Topix is an essential tool for gauging the performance of the Japanese stock market and for making informed investment decisions. It is a benchmark for portfolio management and is widely used by mutual funds and exchange-traded funds (ETFs) that aim to replicate the performance of the Japanese market. Additionally, its comprehensive nature makes it a valuable index for assessing the impact of economic policies, global events, and market trends on Japanese companies.
For international investors, including those in the UK, the Topix can be a gateway to diversifying their portfolios by investing in the Japanese market, known for its technological innovation and robust manufacturing sector. However, it's important to consider currency risk and geopolitical factors when investing internationally.
This Trustnet Learn article was written with assistance from artificial intelligence (AI). For more information, please visit our AI Statement.