The Nikkei Stock Average has risen by approximately ¥30,000 over the past year, reaching the ¥70,000 range for the first time in June. The backdrop includes an increase in the number of people seeking the right to become owners of shares in the 225 companies, as well as expectations for AI-related stocks.
The Nikkei Stock Average is the average share price of 225 companies, published by Nikkei, while shares represent the right to become an owner of a company listed on a market. A stock price is the price of the right traded in the market, and the average share price of the companies selected by Nikkei from among the 225 companies is calculated as the Nikkei Average.
The Nikkei Average’s record high in the ¥70,000 range is attributed to an increase in demand for shares, with funds flowing particularly into companies whose future profits are expected to grow. Expectations for companies with AI-related technologies are also cited as a factor pushing up the average.
A rise in the Nikkei Average does not mean that the Japanese economy as a whole is immediately recovering. It has also been pointed out that the index can be pulled upward by sharp gains in a few stocks rather than by broad-based increases across many share prices. Calculations began in 1985, and as of 2024, the index is said to have reached a period when it set a new record high of ¥38,915.87.
Movements in society and the world are also said to affect stock prices, with changes in Japan’s prime minister, global events and weather potentially having an impact. An explanation in Q&A format of how the Nikkei Stock Average works, its criteria and its historical movements is also provided.