Have you ever wondered what the actual Nikkei 225 opening index is and why many investors keep following it? I’ve recently studied this topic seriously and want to share the knowledge I’ve gained with you.

The Nikkei 225, or Nikkei Opening Index, is Japan’s most important stock index in the world. It consists of 225 leading Japanese companies listed on the Tokyo Stock Exchange. These companies include well-known names like Hitachi, Fujitsu, Panasonic, Sharp, and Toyota. To compare with the Thai market, it’s similar to the SET50, which includes KBANK, PTT, CPF, and others.

What makes the Nikkei 225 opening index significant is that it is the oldest stock index in Asia. It was first introduced on September 7, 1950, which means it’s over 70 years old. This long history adds to its credibility and trustworthiness.

Regarding price movements, the Nikkei 225 once reached a peak of 38,916 in December 1990 during Japan’s bubble economy, then fell to 7,568 in February 2009 after the U.S. subprime crisis. Recently, as of December 17, 2025, the index stood at 49,512 points, surpassing its previous high.

Calculating the Nikkei 225 is quite technical. It is a price-weighted index based on 225 stocks. Every 5 seconds, the stock prices are adjusted using a Price Adjustment Factor (PAF) to make comparisons fair. Since Japanese stocks have different price structures—some at 50 yen, others at 500 or 50,000 yen—adjustments are necessary to ensure the index is calculated accurately.

The selection of stocks for the Nikkei 225 follows a clear system. It is reviewed twice a year, in January and July, with changes effective in April and October. Stocks with low liquidity are removed, and more liquid stocks are added. Additionally, industry balance is considered to ensure the index truly reflects Japan’s economy.

Currently, the Nikkei 225 includes stocks from 36 industries grouped into six major categories: Technology, Finance, Consumer Goods, Capital Goods, Materials, and Transportation. Technology accounts for nearly half of the index, followed by Consumer Goods. Finance and Transportation have the smallest share, only about 2%.

What are the factors driving the Nikkei 225? First, the global economy, since Japan relies heavily on exports, mainly to the U.S. and China. If these economies perform poorly, Japan is affected. Second, Japan’s own economy—GDP growth or contraction. Third, monetary policy—interest rates high or low. Fourth, fiscal policy—spending and taxation. Fifth, the condition of each industry, especially technology, which has a significant weight. Sixth, the earnings of the 225 companies. Seventh, the yen exchange rate—if the yen strengthens, Japanese exports become more expensive; if it weakens, exports are boosted. Eighth, oil prices, since Japan depends heavily on imported oil.

Why invest in the Nikkei 225? First, if you believe Japan’s economy will grow well, you can own shares of 225 major companies without managing each one. Second, high liquidity, as the index is composed of highly liquid stocks, resulting in low fees. Third, diversification—if the Thai market faces issues, the Nikkei 225 may be less affected.

There are two main ways to invest: First, Exchange Traded Funds (ETFs). Asset management companies offer funds tracking the index, such as KT-JPFUND-A from Krung Thai or TMPJE from TMBAM Eastspring. However, these carry risks related to the fund manager’s operations, liquidity, and currency exchange rates. Second, Contracts for Difference (CFDs). These are instruments allowing you to profit from price movements without owning the actual stocks. You only need to put up a margin, such as 1 to 100 leverage. This type of investment is very risky because small fluctuations can wipe out your margin and force a closeout.

In summary, the Nikkei 225 is one of the most important indices in the world. If you’re interested in investing in Japan, you should understand the Nikkei 225 first, as it best reflects Japan’s economic conditions. Whether through ETFs or CFDs, understanding the risks involved is essential.