Japan's stock exchange to overhaul Topix by focusing on liquidity
By Kevin Buckland
TOKYO, June 19 (Reuters) -The Tokyo Stock Exchange said on Wednesday it will change the make-up of the benchmark Topix to boost its attraction to investors by putting additional emphasis on liquidity.
A stock's liquidity will determine its inclusion in the revised index, according to a document on the bourse's website. The change, with effect from October 2026, will have an impact on the investment strategies of domestic and global investors.
The Topix - short for Tokyo Price Index - is a capitalisation-weighted metric for stock prices on the Tokyo Stock Exchange that currently includes all shares in the so-called first section, composed of the largest companies.
The new Topix will better represent the overall market, with constituents chosen from across the prime market, standard market and growth market, instead of solely the prime market.
Current constituents that are not selected for the revised index will we phased out with quarterly weighting reductions over a two-year period.
In October, the bourse announced a first-stage revamp of the Topix that would reduce the number of constituents by 439 from about 2,100 currently, with the change taking effect in January of next year.
Reporting by Kevin Buckland; Editing by Jacqueline Wong
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