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The Nikkei 225 (日経平均株価 Nikkei heikin kabuka?, 日経225), more commonly called the Nikkei, the Nikkei index, or the Nikkei Stock Average (//, //, or //), is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the Nihon Keizai Shimbun (Nikkei) newspaper since 1950. It is a price-weighted index (the unit is yen), and the components are reviewed once a year. Currently, the Nikkei is the most widely quoted average of Japanese equities, similar to the Dow Jones Industrial Average. In fact, it was known as the "Nikkei Dow Jones Stock Average" from 1975 to 1985.
The Nikkei 225 began to be calculated on September 7, 1950, retroactively calculated back to May 16, 1949. Since January 2010 the index is updated every 15 seconds during trading sessions.
The Nikkei 225 Futures, introduced at Singapore Exchange (SGX) in 1986, the Osaka Securities Exchange (OSE) in 1988, Chicago Mercantile Exchange (CME) in 1990, is now an internationally recognized futures index.
The Nikkei average has deviated sharply from the textbook model of stock averages which grow at a steady exponential rate. The average hit its all-time high on December 29, 1989, during the peak of the Japanese asset price bubble, when it reached an intra-day high of 38,957.44 before closing at 38,915.87, having grown sixfold during the decade. Subsequently, it lost nearly all these gains, closing at 7,054.98 on March 10, 2009—81.9% below its peak twenty years earlier.
Another major index for the Tokyo Stock Exchange is the Topix.
On March 15, 2011, the second working day after the massive earthquake in the northeast part of Japan, the index dropped over 10% to finish at 8605.15, a loss of 1,015 points. The index continued to drop throughout 2011, eventually bottoming out at 8160.01 on November 25, putting it at its lowest close since March 10, 2009. The Nikkei fell over 17% in 2011, finishing the year at 8455.35, its lowest year-end closing value in nearly thirty years, when the index finished at 8016.70 in 1982.
The Nikkei started 2013 near 10,600, hitting a peak of 15,942 in May. However, shortly afterward, it plunged by almost 10% before rebounding, making it the most volatile stock market index among the developed markets. In October, 2013, the UK-based hedge fund Algorates, whose strategy is based partially on high-frequency trading, a technique most successful in markets with high volatility, announced major positions in the Nikkei 225. 
Stocks are weighted on the Nikkei 225 by giving an equal weighting based on a par value of 50 yen per share. Events such as stock splits, removals and additions of constituents impact upon the effective weighting of individual stocks and the divisor. The Nikkei 225 is designed to reflect the overall market, so there is no specific weighting of industries.
Stocks are reviewed annually and announcements of review results are made in September. Changes, if required, are made at the beginning of October. Changes may also take place at any time if a stock is found to be ineligible (e.g., delisting). All proposed changes will be announced in Nikkei's Japanese newspapers and will appear on Nikkei.com.
After a stock has been replaced, the divisor is reviewed and modified to ensure a smooth transition of the stock index.
|2011 September 28||Amada Co||CSK Holdings Corporation|
|2011 August 29||Aozora Bank||Mizuho Trust & Banking|
|Sony Financial||Mizuho Securities|
|2011 March 29||Yaskawa Electric Corporation||Sanyo Electric|
|Dainippon Screen||Panasonic Electric Works|
|Dai-ichi Life||Sumitomo Trust and Banking|
|2010 October 1||Tokyo Tatemono||Clarion Co., Ltd.|
|2010 September 28||Nippon Electric Glass||Mitsubishi Rayon|
|2010 April 2||JX Holdings|
|2010 March 29||Nisshin Steel||Nippon Oil|
|2010 January 22||Central Japan Railway Company|
|2010 January 20||Japan Airlines|
As of April 2011, the Nikkei 225 consists of the following companies: (Japanese securities identification code in parentheses)