Nikkei 225
Japan's flagship index, and the most instructive example in history of a market that took 34 years to recover.
What it tracks
Nikkei Inc. selects 225 representative companies from the Tokyo Stock Exchange Prime Market. Like the Dow Jones, the Nikkei is price-weighted, a stock trading at ¥50,000 has far more influence than one at ¥500, regardless of company size. Fast Retailing (Uniqlo's parent), with one of the highest stock prices on the TSE, alone accounts for roughly 10% of the . The composition is reviewed annually in September. The index covers a broad range of Japanese industries: consumer electronics, automobiles, industrial machinery, chemicals and retail.
Geographic exposure
Where in the world the index is invested, by domicile of listed company. For global indices this varies significantly between developed and emerging markets.
All 225 companies are listed in Japan. However, Japan's largest companies are highly global: Toyota sells worldwide, Sony's PlayStation is a global platform, Keyence sells industrial automation globally. Non-JPY investors face meaningful currency , the yen has moved 30–50% against major currencies in single years, often swamping the equity return entirely.
Approximate end-2025 figures, returns in JPY
Historical performance
Annual total returns from 2001 onward, including reinvested . Move the slider to see what a different starting amount would have become, and switch to the bar view to see how uneven the path actually was.
Total return, dividends reinvested, before fees and taxes. Past performance is not indicative of future results.
Returns by decade
Average annualised return for each full decade. This view makes it obvious that the path is anything but smooth, the 2000s were a lost decade for US equities, erasing all gains from the dot-com crash and the 2008 financial crisis.
* 2020s is partial (2020–2025). All figures are approximate total return .
Sector breakdown
How the index splits across the eleven standard GICS sectors. The bigger the bar, the larger the weight in the index.
Approximate end-2025 figures, returns in JPY
Top 10 holdings
The largest names in the index by weight. Together they make up a meaningful share of the whole, pay attention to concentration.
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Fast Retailing (Uniqlo) | 9983 | 10.2% |
| 2 | SoftBank Group | 9984 | 4.6% |
| 3 | Tokyo Electron | 8035 | 4.1% |
| 4 | KDDI | 9433 | 2.6% |
| 5 | Shin-Etsu Chemical | 4063 | 2.5% |
| 6 | Fanuc | 6954 | 2.1% |
| 7 | TDK | 6762 | 2.0% |
| 8 | Recruit Holdings | 6098 | 1.9% |
| 9 | Keyence | 6861 | 1.8% |
| 10 | Disco | 6146 | 1.8% |
ETFs that track it
The funds most long-term investors use to own this index. Lower are almost always better. Domicile matters for , UCITS funds are domiciled in Ireland (IE) for European investors, US-domiciled (US) for American ones.
| Ticker | Fund name | Provider | Domicile | Type | |
|---|---|---|---|---|---|
| EWJ | iShares MSCI Japan ETF | BlackRock | US | Dist | 0.50% |
| CJPN | iShares Core MSCI Japan IMI UCITS ETF | BlackRock | IE | Acc | 0.15% |
Accumulating, are automatically reinvested inside the fund. You don't receive cash but the share price grows. Simpler for long-term and more tax-efficient in many European countries.
Distributing, are paid out to you as cash. You decide what to do with them, but you're also responsible for declaring and paying on each distribution. Common preference for investors who want regular income.
A bit of history
Japan's post-war economic miracle drove the Nikkei from under 200 in 1950 to 38,915 by December 1989, a 200-fold increase in forty years. The asset bubble of the late 1980s inflated land and prices to extraordinary levels. When the Bank of Japan raised interest rates to cool the bubble, it burst catastrophically: the index fell 82% over the following nineteen years, reaching a trough of ~7,000 in March 2009. Two "lost decades" followed, the 2000s and 2010s each averaged negative or near-zero real returns. "Abenomics" (2013) injected new stimulus and the index surged +57% that year. The AI and global tech boom of 2023–2024 finally pushed it past the 1989 peak. The Nikkei is the defining example of why past returns do not guarantee future ones, and why across geographies matters.
- + The second-largest developed market in the world, meaningful exposure to a major economy distinct from the US and Europe.
- + Japan's corporate governance reforms (2023–) have unlocked value: companies pressured to return cash to shareholders.
- + Low correlation to US markets historically, genuine in a global portfolio.
- + CJPN at 0.15% is cheap for the exposure it provides.
- − The definitive cautionary tale: -82% peak-to-trough lasting 19 years. Past performance is not a contract.
- − Price-weighted like the Dow, Fast Retailing alone drives ~10% of daily moves regardless of economic logic.
- − JPY : the yen depreciated ~50% vs the euro from 2012 to 2024, wiping out years of equity gains for EUR investors.
- − Two consecutive lost decades (1990s and 2000s), the only major index with that distinction.
- − Demographics: Japan's shrinking, ageing population is a structural headwind to domestic growth.
All figures are approximate end-2025 values for educational illustration. Index composition, weights, holdings and returns change constantly. Nothing here is financial advice or a recommendation.