What Is the Nikkei 225 Index and How Can You Trade and Invest in It? IG Australia

While the Nikkei is an index of 225 selected stocks from the TSE, the TOPIX is an index that includes all the stocks in the TSE. The only way to trade on the Nikkei 225 price directly with us is through our Japan 225 index. You’ll use CFDs to take a position, and your profit or loss will depend on the outcome of your prediction. Most European traders seek to diversify their portfolio, and the Nikkei 225 tends to be the preferred outlet because the Japanese economy is one of the biggest across the globe. The stocks that make the list are reviewed in April and October each year. The index represents the history of the Japanese economy following World War II.

The index continued to fall during that entire year, hitting a low of 8,160.01 on Nov. 25. That year, the Nikkei dropped more than 17%, finishing at 8,455.35, representing the lowest year-end price in over 30 forex trading blog years. So now that you know how the Nikkei 225 has performed over the past 30 years, in the next section of our guide we are going to show you how you can make an investment. As such, it wouldn’t make sense to include smaller organizations on the main index, not least because their effect on the health of the wider economy is less notable.

Diversification can come in the form of an investment into Nikkei-linked ETFs or individual Nikkei shares, which you can also trade on. You’ll also trade the Nikkei 225 directly with us via our Japan 225 offering. Our offering tracks the Nikkei index, enabling you to speculate on the direction of the market price. The Nikkei, like all major indices, is also influenced by global economic events. The global financial crisis of 2008 caused a sharp fall in the Nikkei, reflecting the severe economic downturn that followed. Often referred to as the “Japanese Dow Jones,” the Nikkei 225 is considered the leading benchmark for the Japanese stock market.

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It is seen as a barometer for Japan’s economic health, providing investors around the world with an understanding of the country’s economic condition and business cycle. Buying and managing each individual stock in the Nikkei 225 is costly and impractical, with substantial tax implications. Individual investors can gain exposure through exchange-traded funds (ETFs) whose underlying assets correlate to how to become it security specialist, salary and degree requirements the Nikkei 225.

Trade on individual Nikkei 225 stocks

1. One option is the MAXIS Nikkei 225 Index ETF, which offers exposure to the Japanese stock market with a U.S.-listed, dollar-denominated exchange-traded fund.
2. Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.
3. Located in the capital city of Tokyo, the stock exchange lists more than 3,500 companies across multiple industries.

Alternatively, you’ll trade via futures, which have wider spreads but no overnight fees using our CFD trading account. The Nikkei index (also referred to as the Nikkei 225) is a stock market that lists the 225 largest companies based in Japan. Some of the biggest components of the Nikkei include companies within electric machinery, chemicals, services and tech. Most of the companies on the index are major exporters, so the market is not only highly sensitive to the global business cycle but also to the level of the yen. Recent fears of a US recession caused Japan’s stock market crash which saw the Nikkei sink by 12% at the start of August.

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The risks of loss from investing in CFDs can be substantial and the value of your investments may fluctuate. 72% of retail client accounts lose money when trading CFDs, with this investment provider. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Investing in the Nikkei offers exposure to major Japanese industries and diversification, albeit with unique risks tied to Japan’s economy and the index’s price-weighted nature. This unique calculation makes it more sensitive to binance coin price bnb price index chart and info stock price fluctuations. The broader Nikkei 500 includes 500 companies, providing a more comprehensive picture of the Japanese economy.

While the above figures do make nervous reading, it is important to remember that investing is all about timing. In fact, at the time of writing in March 2019, the Nikkei 225 index is positioned at just over 21,500 points. Moreover, the highest record the Nikkei 225 index has been able to set since its 1989 heights was the 24,270 points it hit in December 2018. For those not familiar with the Yen, that amounts to GBP£270 billion or US$357 billion.