Nikkei 225 vs TOPIX: 225 price-weighted stocks vs 1,636

Key takeaways

• The Nikkei 225 is a price-weighted average of 225 Prime Market stocks run by Nikkei Inc.; TOPIX is a free-float market-cap-weighted index of 1,636 stocks (end-September 2026) run by JPX Market Innovation & Research.
• The Nikkei is far more concentrated: Advantest, Tokyo Electron, Fast Retailing and SoftBank Group made up 37.58% of it at the end of September 2026, while TOPIX's ten largest stocks together weighed 24.10%.
• Banks lead TOPIX (Mitsubishi UFJ Financial Group is its largest stock at 4.02%), while technology accounts for 56.96% of the Nikkei 225, according to the two official factsheets.
• TOPIX is being overhauled: after the first annual review at the end of October 2026 it will have 1,669 constituents, 683 of which are being phased down in eight quarterly steps through July 2028.
• Both indexes are calculated during Tokyo's cash session (09:00–11:30 and 12:30–15:30 JST), and both have futures on the Osaka Exchange and ETFs listed in Tokyo.

Nikkei 225 vs TOPIX comes down to weighting. According to Nikkei Inc. and Japan Exchange Group (JPX), the Nikkei 225 tracks share prices of 225 companies, while TOPIX weights 1,636 stocks by free-float market value. That is why the two often diverge.

This guide explains the Nikkei 225 vs TOPIX difference in plain terms: how each index is calculated, why a handful of chip and retail stocks can swing the Nikkei, what is changing in TOPIX in 2026–2028, and which futures and ETFs follow each one. Figures are from the official factsheets dated September 30, 2026, unless stated otherwise.

Nikkei 225 vs TOPIX at a glance

Sources: Nikkei Indexes Nikkei 225 profile and factsheet (FS-101-20260930); JPX TOPIX page and TOPIX factsheet (as of September 30, 2026); JPX next-generation TOPIX documents of October 7, 2026; JPX index futures specifications. Data as of September 30, 2026, 06:30 UTC (Tokyo close).

How the Nikkei 225 is calculated

The Nikkei 225 is a price-weighted index, the same family as the Dow Jones Industrial Average. Nikkei Inc. takes each constituent's share price, multiplies it by a "price adjustment factor" that reflects past share splits and capital changes, adds the results up and divides by a divisor. The divisor exists so that changes in the line-up or corporate actions do not cause artificial jumps in the index. On September 30, 2026, Nikkei announced that the divisor would fall to 29.66435840 ahead of the October review.

The key point: in a price-weighted index, a stock with a high share price (after the adjustment factor) has more influence than a cheaper stock, regardless of how large the company is. A big bank with a modest share price can matter less to the Nikkei than a mid-sized chip tester with an expensive share.

Constituents are chosen from the Tokyo Stock Exchange Prime Market on two criteria, according to Nikkei: liquidity and sector balance across seven broad sector groups. The line-up is reviewed in April and October.

A worked example of the Nikkei's leverage

Using Nikkei's published numbers, the arithmetic is simple. A JPY 100 rise in a stock with a price adjustment factor of 1 adds about 3.4 points to the index (100 ÷ 29.664). Advantest's factor was cut from 7.2 to 6.4 from October 1, 2026, according to Nikkei. Even at 6.4, a JPY 100 rise in Advantest shares adds about 21.6 points (100 × 6.4 ÷ 29.664). That single-stock sensitivity is why market reports often say the Nikkei was "lifted" or "dragged" by a few heavyweights.

The 10% weight cap

Nikkei introduced a cap in July 2022 to stop any single stock from dominating the average. If a constituent's weight is above 10% on the last trading day of July or January, Nikkei reduces its price adjustment factor at the October or April review. Fast Retailing was the first case: its weight hit 10.4% on July 31, 2024, and its factor was cut from 3 to 2.7 from October 1, 2024, Nikkei Asia reported. Advantest followed in 2026: its weight was 12.2% on July 31, 2026, which triggered the October reduction described above.

The cap works only at reviews, so a stock can sit above 10% between them. Nikkei's end-September factsheet, which predates the October 1 change, still shows Advantest at 12.39%.

How TOPIX is calculated

TOPIX is a free-float adjusted market-capitalisation-weighted index. Each company counts in proportion to the market value of shares that can actually be traded, leaving out holdings such as large cross-shareholdings. The index compares today's total free-float market value with its value on January 4, 1968, which is set at 100 points, according to JPX.

Because weight follows company size, TOPIX looks much more like the Japanese economy's listed corporate sector. Banks, automakers, electronics groups, trading houses and service companies all carry meaningful weight, and no single stock dominates. JPX also applies a 10% weight cap.

The TOPIX overhaul: from 1,636 stocks to about 1,000

TOPIX is in the middle of its biggest redesign in decades. Under the "next-generation TOPIX" rules, all TSE market segments (Prime, Standard and Growth) are now eligible, and constituents are chosen by annual review using two tests, according to JPX:

• Size: to stay in, a stock must rank within the top 97% of cumulative free-float market capitalisation.
• Liquidity: its annual traded value ratio (12 months of median daily trading value relative to free-float market cap) must be 0.14 or more.

JPX published the results of the first review on October 7, 2026. The index had 1,636 constituents at the end of August 2026. After the review at the end of October it will have 1,669, including 46 additions from the Standard and Growth markets. However, 683 constituents that missed the criteria are subject to transitional measures. Their weight is reduced in eight equal quarterly steps, to 87.5% in January 2027 and down to 12.5% in July 2028, before removal in October 2028. Stocks that pass a re-evaluation in October 2027 stop being phased out. JPX estimates the index will have 986 constituents at the end of July 2028, plus any stocks that pass the re-evaluation.

JPX also expects total free-float market cap to move from about JPY 775 trillion before the review to about JPY 766 trillion after the transition, with market coverage falling from about 97.4% to 96.4%. Most removed companies are small, so the effect on TOPIX's day-to-day movement should be limited, but index funds that track TOPIX will have to sell those stocks gradually.

Why the Nikkei swings more on a few stocks

The weight tables below show the practical difference. The same company can matter three to seven times more in the Nikkei 225 than in TOPIX.

Sources: Nikkei 225 factsheet FS-101-20260930 (data as of end-September 2026); JPX TOPIX factsheet as of September 30, 2026. Data as of September 30, 2026, 06:30 UTC.

Two patterns follow from these numbers:

• Chip and AI stocks drive the Nikkei. Technology is 56.96% of the Nikkei 225 by Nikkei's own sector grouping, and Advantest and Tokyo Electron alone are more than a fifth of it. When US chip stocks sell off, the Nikkei usually falls harder than TOPIX. That pattern showed up during the AI-led selloff covered in Bullquill's report on the Nikkei's 2% fall.
• Banks and interest rates matter more for TOPIX. Three megabanks (MUFG, Sumitomo Mitsui and Mizuho) are in the TOPIX top 10 with a combined 8.72%. Higher Japanese yields tend to help bank earnings, so a hawkish Bank of Japan can lift TOPIX relative to the Nikkei.

A real example: on May 13, 2026, the Nikkei closed at a record 63,272.11, up 0.84%, while TOPIX rose 1.20% to 3,919.48, Jiji Press reported. Buying that day was broad, centred on companies with strong earnings and shareholder returns, so the broader index outperformed.

The NT ratio

Traders track the gap with the "NT ratio": the Nikkei 225 divided by TOPIX. Using the May 13, 2026 closes, the ratio was about 16.1 (63,272.11 ÷ 3,919.48). A rising NT ratio means the Nikkei's heavyweights are outperforming the broad market; a falling one means the rally is broader or led by banks and value stocks.

Returns and volatility

Concentration cuts both ways. Nikkei's factsheet shows a 32.61% price gain in 2026 through end-September and a one-year return of 48.56%, with one-year annualised volatility of 32.21%. JPX's factsheet shows a one-year total return of 33.91% for TOPIX, including dividends. The figures are not strictly comparable because they use different return bases, but they show how much the Nikkei's tech tilt has amplified both the rally and the daily swings.

Trading hours and when the indexes are published

Both indexes are calculated from the Tokyo Stock Exchange's cash session: 09:00–11:30 and 12:30–15:30 JST (00:00–02:30 and 03:30–06:30 UTC). JPX extended the afternoon close from 15:00 to 15:30 on November 5, 2024. The Nikkei updates every five seconds and TOPIX every second. Full hours for Tokyo and eight other exchanges, plus 2027 holidays, are in Bullquill's guide to Asian stock market hours and holidays.

Outside cash hours, prices come from futures. Nikkei 225 futures on the Osaka Exchange trade from 08:45 to 15:45 and from 17:00 to 06:00 JST, according to JPX. That night session lets markets react to US data and central bank decisions while Tokyo's cash market is closed.

Which ETFs and futures track each index

Both indexes support large markets in investment products:

• Futures: the Osaka Exchange, part of JPX, lists Nikkei 225 Futures (index × JPY 1,000, with mini and micro versions) and TOPIX Futures (index × JPY 10,000, with a mini version). Nikkei 225 futures settle in cash against a special quotation calculated from opening prices on the day after the last trading day.
• ETFs in Tokyo: two of the oldest are Nomura Asset Management's NEXT FUNDS TOPIX ETF (code 1306) and NEXT FUNDS Nikkei 225 ETF (code 1321), both listed on July 13, 2001, according to JPX. Several other managers run ETFs on each index.
• Foreign ETFs: many popular US-listed Japan funds follow other benchmarks, such as MSCI indexes, rather than the Nikkei or TOPIX. Check a fund's stated benchmark before comparing its returns with either index.

Because TOPIX index funds hold over a thousand stocks, the 2026–2028 reform affects their portfolios more than the Nikkei's semi-annual line-up changes affect Nikkei funds.

What it means

For anyone reading Japan market news, the choice of index changes the story. The Nikkei 225 is the famous headline number and a fast gauge of global tech and AI sentiment, because four stocks drive more than a third of it. TOPIX is the better measure of how the broad Japanese market and its banks, exporters and domestic companies are doing. When the two diverge, the NT ratio usually explains why.

This matters in the coming week. The Bank of Japan's policy meeting on October 29–30 could move bank shares and the yen, which tends to show up in TOPIX first, while US tech earnings and chip demand remain the bigger driver of the Nikkei. The meeting schedule is in Bullquill's central bank meeting calendar, and daily index levels and drivers are covered in the Japan stocks daily brief. More on both benchmarks is collected on the TOPIX topic page.

Index weights shift with share prices and reviews. The figures here use the official end-September 2026 factsheets, and this page will be updated after the October 2026 TOPIX review and the next Nikkei weight data.

Sources

• Nikkei Indexes: Nikkei 225 index profile (divisor notice, calculation and review rules)
• Nikkei Indexes: Nikkei 225 factsheet, FS-101-20260930
• Nikkei Indexes: Nikkei Stock Average Index Guidebook
• Nikkei Asia: Nikkei to lower Advantest's weight in Nikkei 225 (July 31, 2026)
• Nikkei Asia: Nikkei 225 to cap Fast Retailing share weight (July 31, 2024)
• Japan Exchange Group: TOPIX (Tokyo Stock Price Index)
• Japan Exchange Group: TOPIX factsheet (as of September 30, 2026)
• Japan Exchange Group: Next-generation TOPIX revisions
• JPX Market Innovation & Research: First periodic review results, appendix (October 7, 2026)
• Japan Exchange Group: Nikkei 225 Futures contract specifications
• Japan Exchange Group: Outline of index futures specifications
• Japan Exchange Group: ETF listing information (NEXT FUNDS 1306 and 1321)
• Japan Exchange Group: Extension of trading hours (press release)
• Jiji Press via Adnkronos: Nikkei 225 hits record closing high above 63,000 (May 13, 2026)

This article is for information only and is not investment advice.