Japan Exchange Group Overhauls TOPIX Index, Reducing Companies to 1,000
Japan Exchange Group slashes TOPIX index constituents from 1,700 to 1,000 under strict new liquidity rules, drawing praise from Julius Baer analysts.
The Japan Exchange Group has announced a major overhaul of the TOPIX index, reducing the number of listed companies from nearly 1,700 to approximately 1,000. According to Louis Chua, a senior executive at Julius Baer, this strategic shift marks a significant milestone in Japan's corporate reform agenda, enforcing stricter liquidity and free-float criteria.
Staged Implementation Through 2028
To ensure market stability and mitigate potential volatility, the reduction will be executed gradually in eight equal quarterly phases, starting in October 2026 and concluding in July 2028. A comprehensive reassessment is scheduled for October 2027 to evaluate companies striving to meet the updated inclusion thresholds.
"As market liquidity and the fundamentals of the included companies are expected to improve, overall stock market performance should follow. We view these changes positively as they enhance benchmark quality and support corporate reform," Chua noted.
Strengthening the Investment Outlook
Julius Baer maintains an overweight stance on Japanese equities, backed by robust profit growth, record shareholder returns, and accelerated structural reforms. Analysts reiterate a target of 75,000 for the Nikkei 225 index despite near-term macroeconomic uncertainties.
