About the Tokyo Stock Exchange
The Tokyo Stock Exchange is the largest stock exchange in Japan. Headquartered in Tokyo, it is the world’s third-largest stock exchange by market capitalisation, and the largest in Asia. Keep reading to learn more about the history of the Tokyo Stock Exchange, the top stocks that trade on the exchange, and more.
The Tokyo Stock Exchange was founded in 1878 as the Tokyo Kabushiki Torihikijo, and has gone through numerous changes since.
In 1943, the Tokyo Stock Exchange joined with 10 other major exchanges in the country to form a unified Japanese Stock Exchange. This arrangement didn’t last long, however, as the atomic bombing of Nagasaki at the end of World War 2 caused the Japanese Stock Exchange to close and reorganise.
The Tokyo Stock Exchange reopened in its current form in 1949. A boom in Tokyo’s tech sector in the 1980s led to the exchange becoming the largest in the world for several years, comprising a staggering 60 percent of the world’s stock market capitalisation at one point in 1990. The subsequent slump in Japan’s economy knocked the Tokyo Stock exchange off its perch as the world’s largest exchange, with a 10-year downturn from 1991 to 2001 causing the most damage.
The Tokyo Stock Exchange has a long-standing partnership with the London Stock Exchange, developing numerous joint ventures focused on new forms of trading technology.
There are a number of different indices that are used to track the performance of the Tokyo Stock Exchange. This includes TOPIX, TOPIX 1000, TOPIX 500, TSE 300 Index, KSE 100 Index, TOPIX Growth, Jpx-Nikkei Index 400, and Nikkei 225, as well as many others.
The two most important stock market indices, though, are the Nikkei 225 and the Tokyo Stock Price Index.
The Nikkei 225 – commonly referred to as the Nikkei index, Nikkei, or Nikkei Stock Average – was founded in 1950. A price-weighted index, the Nikkei consists of 225 of Japan’s largest publicly traded companies, hailing from a wide array of different sectors. The largest of those sectors is electric machinery, which includes such multinational conglomerates as Sony, Hitachi, and Panasonic.
The Tokyo Stock Price Index, commonly called TOPIX has a broader scope than the Nikkei 225. The index consists of all the domestic companies within the Tokyo Stock Exchange’s First Section, which houses the exchange’s largest stocks. This means it tracks over 1,500 stocks.
The Tokyo Stock Exchange includes over 3,700 stocks. Its market cap of $5.6 trillion USD makes it the third-largest stock exchange in the world.
The five largest stocks in the Tokyo Stock Exchange are automotive giant Toyota Motor, holding company behemoth SoftBank, electronics manufacturer Keyence, drug manufacturer Chugai Pharmaceutical, and leading electronics company Sony.