Based on the characteristics of stock indexes, TOPIX, which is used as a representative index for the Japanese market, is gradually revising and transitioning its constituent selection criteria. The new rules will apply from October 2026, with the changes expected to be completed by 2028.
Stock indexes are expected to be objective, transparent and easy to understand, and the Nikkei 225 and TOPIX each serve different roles. The Nikkei 225 has long been used as an intuitive gauge of market trends, while TOPIX is considered important as a benchmark that broadly reflects the market as a whole.
The Nikkei 225's constituent selection was reviewed in July 2026, and new rules, including a revision of the sector classification, took effect on 1 October. As a result, the classification increased from 6 sectors to 7, with information and communications treated as an independent sector.
The TOPIX review aims to balance market representation with investability, shifting to a policy under which constituent selection does not depend on market segment. Stocks will be selected based on market capitalization and trading value data as of the end of August 2026, the results are expected to be announced around 7 October, and the transition will begin from the end of October 2026.
Under the changes, TOPIX constituents will ultimately be adjusted in stages through 2028, potentially affecting the management of assets linked to TOPIX, currently estimated at approximately ¥165 trillion. Additions and removals of constituents could affect supply and demand, and the index is expected to become more practical to use.