In Japan’s equity market in 2026, the Nikkei Stock Average has continued to set new highs while gains in investors’ individual holdings have remained limited. This article examines the backdrop using 3 indicators: the NT ratio, the 25-day moving-average deviation rate and the advance-decline ratio.
In the current stock market, the Nikkei Stock Average has risen sharply to new highs, while price movements among individual stocks have varied widely. The first indicator to come under scrutiny is the NT ratio, calculated by dividing the Nikkei Stock Average by the TOPIX, which surged from late May through late June. This created a market in which the Nikkei alone drove performance, reaching ¥72,366 while the TOPIX stood at 4,016 points. A high NT ratio indicates that high-priced stocks are exerting a strong influence and pulling up the market as a whole.
More specifically, the NT ratio fluctuated significantly by late July, falling to 15.46x. The top 4 stocks, Advantest, Fast Retailing, Tokyo Electron and SoftBank Group, accounted for approximately 35% of the Nikkei Stock Average’s overall contribution. From the 25 June level, the Nikkei fell by approximately ¥10,932, while the TOPIX declined by only 42 points. The sharp decline in semiconductor-related stocks and the resilience of financial stocks may have supported this divergence.
The analysis then moves to the second indicator, the deviation from the 25-day moving average, and the third, the advance-decline ratio. These indicators offer clues to shifts in market concentration, overheating and the allocation of funds between a broad range of stocks and selected names, bringing into focus the nature of a market that is behaving differently from textbook expectations.