JPX to cut TOPIX constituents from about 1,600 to 986 under new selection rules
In short
Japan Exchange Group announced on Oct 7 that it will sharply reduce the number of companies in the TOPIX stock index, to 986 from 1,634, in a phased change running from late October to July 2028. A reassessment in October 2027 will decide which companies stay. Nikkei links the overhaul to efforts to push listed companies to raise their value, and Mainichi notes about 160 trillion yen in assets track the index.
Read the full story 2 min read
Japan Exchange Group announced on Oct 7 that it will sharply reduce the number of companies in the TOPIX, one of Japan's benchmark stock indices. Asahi Shimbun reported the constituent count will fall to 986 companies from 1,634. Mainichi Shimbun reported the same change as a reduction from about 1,600 companies to about 1,000. The change is a first under a new system of annual constituent replacement introduced as part of the market reform begun in 2022, according to Mainichi Shimbun. [ 1 , 3 ]
The overhaul is to be carried out in stages from late October through July 2028. A reassessment in October 2027 will determine which companies still fail the criteria; Asahi Shimbun said the actual number of constituents may change as a result, and Mainichi Shimbun said companies still judged not to meet the criteria at that point will be phased out by July 2028. From October 2028, constituents will be replaced on a regular annual basis, Asahi Shimbun reported. [ 1 , 3 ]
Under the new criteria, all stocks listed on the Prime, Standard and Growth markets are eligible, and companies are selected by market capitalisation of shares that are readily traded, excluding cross-held shares, according to Mainichi Shimbun. The same report said 683 companies, including the entertainment group Avex and the restaurant operator Watami, are subject to transitional measures toward exclusion, while 35 stocks, including Japan McDonald's Holdings and the taxi-hailing app operator GO, are to be added to the index. [ 3 ]
TOPIX dates to 1969 and was created to reflect the price movements of all companies listed on the former First Section of the Tokyo Stock Exchange, with the index calculated on the market value of its constituents, Asahi Shimbun reported. Nikkei described it as an “all-in index” that once included any company on what is now the Prime Market. Mainichi Shimbun said the index comprised about 2,200 companies as of March 2022 and was narrowed to about 1,600 after the exchange's market reorganisation from April 2022. Nikkei reported the peak count of around 2,200. [ 1 , 2 , 3 ]
Mainichi Shimbun cited the Tokyo Stock Exchange as saying that assets in investment trusts and other products linked to TOPIX stood at about ¥160 trillion as of June 2026. Being included makes a company's shares more likely to be bought by investors, while exclusion increases selling pressure, the report said. Kubota Tomoichiro, chief market analyst at Matsui Securities, told Mainichi Shimbun that inclusion would raise a company's profile and help it raise funds, adding that “being added to TOPIX” may become an urgent priority for some companies. Nikkei wrote that the renewal of constituents would encourage listed companies to improve their value and could lift the Japanese equity market. [ 2 , 3 ]
Why it matters
The TOPIX is one of Japan's two benchmark equity gauges, and about ¥160 trillion in funds tracks it, so inclusion or exclusion affects how easily a company's shares are bought. Outlets frame the change as part of Tokyo's market reform, which they say should channel investment toward growth companies and press listed firms to improve value. For excluded firms, the documents point to stronger selling pressure.
Key facts
- Japan Exchange Group announced on Oct 7 that it will replace the constituents of the TOPIX index. [ 1 , 3 ]
- The number of constituents falls to 986 from 1,634, according to Asahi Shimbun, while Mainichi Shimbun reports about 1,600 shrinking to about 1,000. [ 1 , 3 ]
- The changes are to be carried out in stages from late October until July 2028. [ 1 , 3 ]
- A reassessment in October 2027 will decide whether companies that do not meet the new criteria are excluded, and the actual number of constituents may change. [ 1 , 3 ]
- From October 2028, constituents will be replaced on a regular annual basis. [ 1 , 3 ]
- 683 companies, including Avex and Watami, are subject to transitional measures toward exclusion, while 35 stocks including Japan McDonald's Holdings and the GO taxi app are to be added. [ 3 ]
- Assets in investment trusts and other products linked to TOPIX totalled about ¥160 trillion as of June 2026, according to the Tokyo Stock Exchange. [ 3 ]
Confirmed by several sources
- Japan Exchange Group announced on Oct 7 that TOPIX constituents will be sharply reduced. [ 1 , 3 ]
- The reduction is to be implemented in stages from late October until July 2028. [ 1 , 3 ]
- A reassessment in October 2027 will determine which companies remain in the index. [ 1 , 3 ]
- TOPIX was originally an index that included essentially all companies on the Tokyo Stock Exchange's First Section, now the Prime Market. [ 2 , 3 ]
Still unclear
- The exact final number of constituents: Asahi Shimbun reports 986, while Mainichi Shimbun reports about 1,000. The two outlets give different figures, and Asahi Shimbun says the actual number may change after the October 2027 reassessment.
- Whether the 683 companies under transitional measures will all be excluded. Only Mainichi Shimbun reports the figure, which it says is single-source.
- The effect of the change on individual share prices and on the wider market. The documents describe expected effects through analysts and index-linked asset figures, but no outcome is yet reported.
What local media are saying
Timeline, local time
- Asahi Shimbun publishes its report on the JPX announcement, citing a reduction from 1,634 to 986 constituents. [ 1 ]
- Nikkei publishes its analysis describing the change from an all-in index to a selective one. [ 2 ]
- Mainichi Shimbun publishes its report with named companies to be excluded and added, and the ¥160 trillion in index-linked assets. [ 3 ]