What is Nikkei 225?
The Nikkei 225, often referred to simply as the Nikkei, is a prominent stock market index that encompasses 225 of the largest and most actively traded companies listed on the Tokyo Stock Exchange. This comprehensive representation of Japan's equity market makes the Nikkei 225 a valuable tool for providing an overall snapshot of the Japanese stock market.
This index is unique in that it employs a price-weighted methodology, meaning that stocks with higher prices have a greater influence on the index's movements. It encompasses a diverse array of companies spanning various sectors, with a strong emphasis on Japan's economic giants.
As a crucial gauge of the nation's economic well-being, the Nikkei 225 plays a vital role in offering insights about the performance and trends in Japanese stocks. Its rich history and reputation establish it as a fundamental reference point for anyone interested in understanding the intricacies of Japan's financial landscape. However, there have been some changes recently.
Find out about Nikkei 225 New Changes After Semi-Annual Review and SGX Launces Nikkei 225 Climate PAB Futures.
Trading Nikkei 225 Futures
Traders can invest in Nikkei 225 index futures and options through 3 main exchanges. Orient Futures Singapore offers Nikkei 225 futures from Chicago Mercantile Exchange (CME), Osaka Exchange Incorporated (JPX), and the Singapore Exchange (SGX).
CME Nikkei 225 Futures
The CME Group offers several types of Nikkei 225 Futures, as follows:
- Nikkei 225 (USD) Futures
- Nikkei 225 (Yen) Futures & Nikkei 225 (Yen) BTIC Futures
Click to find out about the CME Nikkei 225 futures Contract Specifications and the CME trading hours.
JPX Nikkei Futures
The Osaka Exchange Incorporated (JPX) offers several types of Nikkei Futures and Options, as follows:
- JPX Nikkei Index 400 Futures
- Nikkei 225 Futures
- Nikkei 225 Options
- Nikkei 225 Mini Futures
Click to find out about JPX trading hours here.
SGX Nikkei 225 Index Futures
The Singapore Exchange (SGX) offers several types of SGX Nikkei Futures, as follows:
- Nikkei 225 Index Futures
- Nikkei 225 Index (Trade at Index Close) Futures
- Nikkei Climate PAB Futures
- Nikkei ESG-REIT Index Futures
- Nikkei Stock Average Dividend Futures
Click to find out about the Nikkei 225 futures Contract Specifications SGX and the SGX trading hours.
Nikkei 225 Rising Towards Shattering 1989 Record High
According to Biznews, Japan's Nikkei 225 is on the verge of surpassing its all-time high of 38,915.87, set in 1989, marking an unexpected turn of events.
Fueled by local and Chinese investors, the index is within 10% of its historic peak despite a New Year's earthquake. Japan's resilience, highlighted by a quick recovery in the affected region, is potentially delaying Bank of Japan interest-rate hikes. The Tokyo Stock Exchange's emphasis on corporate value improvement is transforming the market, reflecting a leap toward a revitalized Japanese economy.
The release of the Tokyo Stock Exchange's "name and shame" list, identifying firms taking steps to enhance corporate value, is a significant move toward overcoming the previous lost decades.
While some prime-listed companies, including Toyota Motor Corp. and Fast Retailing Co., have not presented plans to improve share prices, the TSE's pressure campaign to induce improvement is ongoing. About 60% of prime members trade below book value, but these firms are more likely to disclose efforts to boost their stocks.
Japan Exchange Group Inc. CEO Hiromi Yamaji aims for long-term value improvement, distinguishing it from temporary buybacks. The Tokyo bourse's campaign continues, with plans to require prime-listed firms to make corporate disclosures in English and Japanese next year. Positive signs include the market's comfort with potential BOJ interest rate changes and increased demand from Chinese investors, reflecting a shift in perceptions about Japan's investment landscape.
While uncertainties exist, such as potential interest rate changes, regional tensions, and concerns about a recession or a rout in Chinese stocks, the current conditions create a meaningful opportunity for Japan to achieve a new high watermark in 2024.
Nikkei 225 Futures Price
Trading Economics reported that the Nikkei 225 Index surged by 1.4% to reach a closing figure of 35,963 on 19th January 2024, while the broader Topix Index experienced a gain of 0.72% to reach 2,510.
This marked a reversal of a three-day decline for Japanese shares, driven by easing inflationary pressures in the country, which reinforced a dovish outlook on the Bank of Japan's monetary policy.
Recent data revealed that Japan's headline inflation rate dropped to a 17-month low of 2.6% in December from 2.8% in November, and the core inflation print fell to an 18-month low of 2.3%. Investors are now awaiting the central bank's policy decision in the upcoming week.
The positive momentum in Japanese shares also followed gains on Wall Street, where strong corporate earnings boosted U.S. technology stocks. Notably, technology stocks led the advance in Japan, with significant gains from companies such as Tokyo Electron (6%), Advantest (8.2%), Disco Corp (3.8%), Renesas Electronics (7.6%), and SoftBank Group (1.3%). For the week, both the Nikkei and Topix indexes concluded with gains, recording increases of 1.08% and 0.63%, respectively.
Nikkei 225 Futures 2024 Outlook
Trading Economics expects the Nikkei 225 to reach 32,580.72 points by the end of this quarter and estimates it to be at 30,067.56 in 12 months.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us.
We provide bespoke services to our professional clients, tailored to their corporate and individual needs. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
