Nikkei 225
In short
The Nikkei 225 is a stock market index that tracks the performance of 225 large, liquid companies listed on the Tokyo Stock Exchange.
In plain words
It acts like a thermometer for the Japanese economy. By looking at the prices of these 225 major companies, investors can see if the Japanese stock market is generally going up or down.
A simple example
If many big Japanese companies like Sony or Toyota see their share prices rise at the same time, the Nikkei 225 index value will increase.
Why it matters
It is the most important indicator of financial health in Japan. Global investors watch it closely to decide whether to invest money in the Japanese market.
Easy to mix up
Do not confuse it with the TOPIX, which tracks a much larger number of companies and uses a different calculation method.