Understanding the Term "NIKKEI" in Finance

The question asks to identify the correct definition of the term "NIKKEI". This term is commonly associated with financial markets, particularly in Japan.

Let's analyze the given options:

• Option 1: Share Price Index of Tokyo Share Market
  This option suggests that NIKKEI is a stock market index representing the Tokyo Stock Exchange.
• Option 2: Name of Japanese Central Bank
  This option suggests NIKKEI is the name of Japan's central bank.
• Option 3: The Japanese name of country’s Planning Commission
  This option suggests NIKKEI is related to Japan's economic planning body.
• Option 4: Foreign Exchange Market of Japan
  This option suggests NIKKEI refers to the Japanese foreign exchange market.

Detailed Analysis of NIKKEI Definition

The term "NIKKEI" most famously refers to the Nikkei 225 Stock Average. This is a stock market index for the Tokyo Stock Exchange (TSE).

• The Nikkei 225 is the most widely followed index of Japanese equities.
• It is calculated daily by the Nikkei, Inc. (formerly Nihon Keizai Shimbun).
• The index is composed of 225 large, publicly owned companies in Japan across various sectors.

Therefore, NIKKEI is indeed a share price index of the Tokyo share market.

Evaluating Other Options

• The Japanese Central Bank is called the Bank of Japan (BOJ), not NIKKEI.
• While Japan has various governmental bodies involved in economic planning, none are commonly referred to simply as NIKKEI.
• The foreign exchange market involves the trading of currencies like the Japanese Yen (JPY). There isn't a specific market entity or index widely known as NIKKEI related to foreign exchange.

Based on this analysis, Option 1 correctly defines NIKKEI in its most common financial context.

Revision Table: Key Japanese Economic Terms

Additional Information on the Nikkei 225

The Nikkei 225 is a price-weighted index, similar to the Dow Jones Industrial Average. This means that stocks with higher share prices have a greater impact on the index's value, regardless of their company's overall market capitalization. It is one of the world's most important stock market indices, reflecting the health and performance of the Japanese economy and its leading companies.