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TOPIX is a stock index that is easy to understand the movement of the entire Japanese stock market. Tokyo Stock Price Index
While the Nikkei average stock price of 225 symbols, TOPIX is used to see the movements close to the TSE Prime market.
TOPIX makes it easy to see the strength, market spread, and the flow of funds for the entire Japanese stock.
In this article, we will organize the meaning of TOPIX, the difference between Nikkei average, how to use it with investment, and attention for beginners.
What is TOPIX?
Tokyo Stock Price Index In Japanese, it is referred to as the "TSE Index".
One of the major Japanese stock market indexes, it is used to see movements close to the TSE Prime market.
In the news, the Nikkei average stock price is easy to take up, but TOPIX is also important. It is because you can check the movement of the whole market that is difficult to see only Nikkei average.
For beginners, it will be easier to understand if you think of TOPIX as a thermometer for the entire Japanese stock.
How to calculate
TOPIX is an index of market capitalization.
As simple as possible, the larger the company size, the higher the impact on the index. The size of the company here is the market capital, including the number of shares issued, as well as the stock price.
Images are:
TOPIX = Current Market Cap ÷ Standard Market Cap × 100In actual calculation, floating share ratio is also considered. First of all, it is enough to understand that “TOPIX is an easy-to-understand index for companies with a large market capital”.
Difference from Nikkei Average
It is important to understand TOPIX.
Nikkei averages consist of 225 symbols, which are easy-to-understand indexes of high stock prices. On the other hand, TOPIX is close to the Torch Prime market and looks at markets based on market capitalization.
| Index | Main Features |
|---|---|
| Nikkei Average Stock Price | Consists of 225 symbols, making it easy to understand |
| TOPIX | Close to the TSE Prime, easy to see the movement of the entire market |
If the Nikkei average rises, the TOPIX may not rise too much. In this case, only some large stocks and semiconductor related stocks may have pushed the market.
On the other hand, if the TOPIX is strong even if the Nikkei average movement is small, it is possible that the purchase is spread to a wide range of brands.
Why Topix is Important
TOPIX is important because it is easy to check whether the entire Japanese stock is really strong.
If you only see the Nikkei average, you may see the entire market strongly due to the influence of certain suspicious strains. However, if the TOPIX has risen, it will be easier to think that the purchase is more wide.
By looking at the TOPIX, you can check the following:
- All Nippon Shares
- Funding into a wide range of stocks as well as large stocks
- Strengths such as Value and Banking
- Spread the whole market
- Relative difference with Nikkei average
When reading Japanese stock, it is basic to see Nikkei average and TOPIX in a set.
How to use for beginners
For beginners, it is good to check the Nikkei average and TOPIX first.
If both are rising, the whole market may be strong. If the average of Nikkei is strong, there may be bias to some large stocks. If TOPIX is relatively strong, it is possible that funds are spread to a wide range of symbols and value shares.
There are also ETFs linked to TOPIX. TOPIX-linked ETF is a choice when you want to invest in a wide range of decentralized investments in the Japanese stock market.
However, TOPIX-linked ETF is also a stock investment. There is no risk as prices fall on the market.
TOPIX
The benefits of TOPIX are that it is easy to understand the movement of the entire Japanese stock. It is easier to see the market spread than Nikkei average and helps to check the contents of the market.
On the other hand, there are points to be careful. TOPIX is a market capitalization weighted type, so the impact of large-scale companies will be large. In addition, there are some aspects that are dispersed throughout the market and are difficult to面 in a short time, like a specific theme strain.
| 項目 | 内容 |
|---|---|
| メリット | Easy to understand the entire stock |
| メリット | Distributed to a wide range of brands |
| Notes | The impact of large-size shares is still large |
| Notes | It is different from the theme strain that grows in short term |
Common misunderstandings
TOPIX does not mean safety.
TOPIX is a stock index. If there is a scenic deterioration, interest rate rise, foreign exchange ctuation, global stock safety etc., it will fall.
When dispersed, it is not damaged. TOPIX is an index that is easy to understand the entire market, but there is a risk of price、ctuations.
- Tokyo Stock Price Index
- In Japanese, it is called the TSE Index.
- Used to see the movements close to the TSE Prime Market
- The market capitalization weighted index makes it easy to understand large companies
- It is easy to understand the contents of the Japanese stock market by looking at Nikkei average and set
For beginners, it is easy to understand by understanding TOPIX as a thermometer for the entire Japanese stock. It makes it easy to determine whether only some large stocks are strong, or whether the whole market is strong.