Japan’s Topix will include a wider range of companies, but fewer, The Tokyo Stock Exchange will broaden the range of stocks included in Japan’s benchmark Topix index while reducing their number as it seeks to broaden its appeal as an investment benchmark.
Companies listed in the Standard and Startup Growth markets will be eligible for inclusion, with the first assessment taking place in October 2026, TSE operator Japan Exchange Group said in a statement on Wednesday. Currently, only those in the large cap primary market are included.
The number of companies in the meter will be reduced to about 1,200 at the next review in 2028, JPX CEO Hiromi Yamaji said at a briefing in Tokyo the same day. The Topix index currently includes more than 2,000 stocks, and at least ¥83 trillion ($526 billion) in assets were tied to the index last year.
More emphasis will be placed on liquidity, and phased weighting reductions of companies with a market capitalization for tradable shares of less than ¥10 billion are underway, according to the statement.
“While the number of components still seems high, actively replacing them will certainly increase confidence in the companies that remain, and in the index,” said Masayuki Doshida, senior market analyst at the Rakuten Economic Research Institute. “The impact seems positive.”
Japan Exchange Group restructured its market and introduced the current Prime, Standard and Growth sections in April 2022 to increase the appeal and understandability of the shares for foreign investors.
Companies that were in the First Section, now the Prime market, at the time of the restructuring remained in the current Topix even if they chose to list in the Standard or Growth Markets.
