Trading value in Japanese equities has become increasingly concentrated in the top-ranked stocks. In June, the top 5% of stocks continued to account for a high share, while the influence of the second-highest-ranked group weakened. The decline in the number of MSCI Japan constituents and a market environment led by individual investors are cited as the factors behind this trend.
The distribution of trading-value shares shows that the 20th percentile (the top 5% of stocks) accounted for 72.8% in June 2026, the third-highest level since 1996. This confirms that the top-ranked stocks accounted for approximately three-quarters of all TOPIX500 trading value.
Meanwhile, the trading-value share of the 19th percentile (the second-highest-ranked group of 5% of stocks after the 20th percentile) hit its lowest level since 1996 on the 23rd. In June, concentration in the 20th percentile strengthened further, while the 19th percentile declined. As a result, the uneven distribution of market liquidity persisted.
The current single-stock concentration is thought to result mainly from the combination of 2 factors. The number of constituents in MSCI Japan, used as a benchmark by overseas investors, has declined, making concentration within TOPIX500 more likely, while individual investors, who face relatively fewer risk constraints, are playing a prominent role in leading market formation. These factors are also affecting the progress of rotation.
Even assuming signs of rotation and an easing of single-stock concentration, a scenario in which AI-related stocks are re-rated remains anticipated. Specifically, some expect the fiscal year ending March 2027 first-quarter earnings announcements to act as a catalyst, potentially easing the concentration of trading value to some extent.