A podcast examined fund trends in July 2026, explaining the widening divergence between the Nikkei 225 and TOPIX and the persistently high NT ratio. It also touched on the role of human judgment behind index investing.
In the first half of 2026, the divergence between the Nikkei 225 and TOPIX became pronounced in the Japanese stock market. While reports highlighted the Nikkei 225 surpassing ¥70,000, TOPIX rose relatively less, widening the gap between the two indices.
The divergence reflects differences in index construction: the Nikkei 225 is calculated as an average of stock prices, whereas TOPIX is calculated as a market-capitalization-weighted average of the overall market. The concentration of funds in high-priced AI-related stocks was also cited as a contributing factor.
The NT ratio reached 17–18 times at points in the first half of 2026, compared with the view that it had more commonly ranged from 10 to 14 times since 1980. As assets have become less likely to increase in ways investors can readily feel, calls emerged to reconsider the current structure of Japanese stock indices.
Developments surrounding SpaceX's new listing were also cited as a turning point. S&P maintained its policy of not adding a company to an index until 12 months after listing, while MSCI, FTSE and Nasdaq proceeded with exceptional inclusions. The decisions of index providers suggested that investors should return to the starting point of investing.