The Tokyo Stock Exchange (TSE/TYO) saw massive gains from 1983 to 1990, making it the largest at the time. However, then things took a downturn: Between 1998 and 2009, the leading index dropped 80% from its peak.
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The TSE/TYO saw gains this year, but this only made up part of what was lost from that long decline. The stock exchange has two leading indices: Nikkei 225 and TOPIX.
What is the Nikkei 225?
It is the main index on the Nikkei 225. Created in 1949, the index includes the 225 companies with the highest market capitalization that are publicly traded. The weighting of stocks in the index is updated annually in October. The weight of stocks in the index is determined by the stock price.
As a result, the 20 stocks with the largest market capitalization account for half of its movements. In addition, if you invest in that indices using shekels you are exposed to changes between the Israeli currency and the Japanese yen. Among the companies included in the index are Toyota – the world's largest automaker, with a market cap of 58.24 trillion yen; Sony – the electronics company operating in various fields such as games, movies, music, and more, with a market cap of 16.3 trillion yen; Mitsubishi Financial Group – one of the largest banks in Japan, with a market cap of 18.77 trillion yen.
Warren Buffett has invested in the Tokyo Stock Exchange starting in 2020, acquiring 5% stakes in five Japanese conglomerates spanning various sectors of the economy. Over the past year, he even increased his holdings. Before 2023, there was little interest in the Japanese stock market, but Buffett's actions, along with moves made by other global investment houses, have drawn interest to this market.
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