TOPIX covers a broad segment of the Japanese stock market. It weights constituents by free-float-adjusted market value, so larger companies have more influence than smaller ones.
History and development
TOPIX was first published on July 1, 1969, with January 4, 1968, set to 100. It offered a broad, capitalization-based measure alongside the price-weighted Nikkei average. Revisions associated with the 2022 market restructuring have moved its design away from relying solely on membership of a particular exchange segment.
References: JPX: TOPIX · JPX: index revisions
Comparing charts on this board
TOPIX complements the Nikkei with a different view of Japanese equities. If the Nikkei rises much more, composition and weighting are useful places to investigate. A broad market universe is not the same as equal weighting: large companies can still have substantial influence on TOPIX.
Arrange TOPIX beside the Nikkei, a bank and an export-oriented company to move between aggregate and company-level observations. Matching directions do not establish that one stock drove the index; contribution analysis requires weights and other information. Use percentage-return gaps to decide which businesses or sectors to investigate next.
Related charts: Nikkei 225 · MUFG · Toyota
Official references: TOPIX