An index is a number that represents movements in the stock or bond market. In Part 1, we introduced the idea that indices serve as the thermometer of the market. In addition to well-known indicators such as the Nikkei Stock Average and TOPIX, many indices are actively managed and used in investment and asset management.
In this article, we introduce two indices developed by Nomura Fiduciary Research & Consulting (NFRC): the Yomiuri Stock Price Index (Yomiuri 333) and NOMURA-BPI. The Yomiuri Stock Price Index is a new Japanese equity index whose calculation and publication began on March 24, 2025, by The Yomiuri Shimbun Group Headquarters. Nomura-BPI, Japan’s leading domestic bond index, will mark its 40th anniversary in May 2026. We spoke with the people in charge of each index to learn how indices are created and how they are used.
Yomiuri 333 was designed to capture Japanese stock movements from a different angle than the Nikkei Stock Average or TOPIX. We asked how it was designed and why it was created as another way to look at the market alongside the major stock indices.
Featured Speaker
Yasuhiro Shimizu, Executive Quantitative Analyst
Head of Index Development Group
Index Services Department
Nomura Fiduciary Research & Consulting
Q. Why was Yomiuri 333 created?
When people talked about Japanese stock indices, the Nikkei Stock Average and TOPIX were the two main ones. But we felt that looking only at the Nikkei Stock Average did not fully show the movement of Japanese stocks, and that another perspective would be helpful. That was the starting point for this project, after The Yomiuri Shimbun approached us about creating a new index.
There are around 4,000 listed stocks in Japan, so it is not easy to capture of all of them with one number. We thought that adding a perspective different from the Nikkei Average, and another different from TOPIX, would make it easier to see and understand the market.
Q. How is Yomiuri 333 structured, and what makes it different?
Yomiuri 333 is based on equal weighting, which means it looks at what happens when the same amount of money is invested in each constituent stock. For example, if you invest JPY 100 million across 100 stocks, the index shows the performance of investing of JPY 1 million in each stock.
Because a stock priced at JPY 10,000 and one priced at JPY 1,000 are treated the same, if one rises 5% and the other falls 5%, the overall change is zero. Since large and small companies are given the same weight, the index is not meant to measure the whole Japanese economy. But it may be closer to the kind of market movement investors have in mind. In other words, if you imagine the average movement of 10 stocks, this index is probably pretty close to that average.
The index was created to provide a third perspective that can reveal market movements that may be harder to notice when looking only at TOPIX or the Nikkei Stock Average.
Q. How are indices created in the first place?
It starts with deciding what the index is for, or what kind of index you want to build. Next, you set the rules for selecting stocks to include so that purpose can be achieved. After that, you test the method using the historical data to see what kind of numbers it would actually produce.
The important thing is to make sure the index has the characteristics it is meant to have, while avoiding unintended biases. You keep adjusting the rules and finding the right balance until the index is completed.
We chose 333 constituents for three reasons. First, it lets the index cover a meaningful portion of the overall market. Second, the stocks need to be liquid enough to trade if a fund is created to track the index. And third, we thought the name had a nice rhythm. We believe that an index should not only make sense, but also be easy for people to remember.
Q. What is the outlook for Yomiuri 333?
We hope it will be used as an indicator that complements parts of the market that are not easy to see through the Nikkei Stock Average or TOPIX, so that market movements can be communicated more accurately. We also hope it will be used in news coverage and by investors.
In addition, equal-weighted indices can deliver strong performance, so we expect it to also be used as an investment tool in funds linked to the index.
NOMURA-BPI is Japan’s first domestic bond index and has long been used in the Japanese bond market. We asked how it is used in institutional investment and analysis, and what role it plays.
Featured Speaker
Hiroe Fukasawa, Executive Quantitative Analyst
Head of Index Administration Group
Index Services Department
Nomura Fiduciary Research & Consulting
Q. What kind of index is NOMURA-BPI?
NOMURA-BPI stands for Nomura Bond Performance Index. It was created exactly 40 years ago, in 1986, making it Japan’s first domestic bond index. The Japanese bond market is huge. It is estimated at around JPY 1 quadrillion, which is larger than the Japanese stock market, which is estimated at around JPY 600–700 trillion on a secondary-market basis. The main investors are institutional investors with a low-risk focus, such as pension funds and insurance companies.
One example is the Government Pension Investment Fund (GPIF), which manages around JPY 300 trillion in assets. It uses NOMURA-BPI as the benchmark for managing about JPY 75 trillion in domestic bonds. Fund managers entrusted with this mandate report their results relative to the index — for example, whether they outperformed by 0.01% or underperformed by 0.01%.
The methodology is market capitalization-weighted, the same approach used by TOPIX, and it covers a broad range of bonds, including Japanese government bonds worth around JPY 1 quadrillion and corporate bonds worth around JPY 70 trillion.
Q. How is NOMURA-BPI used in investment and analysis?
NOMURA-BPI provides not only price movements, but also detailed bond data, such as outstanding amounts, yields, risk metrics for government and corporate bonds, and other debt securities. This information is useful when making investment decisions.
Using this data, analysts can study the investment appeal of municipal bonds and corporate bonds, as well as identify changes in market structure based on shifts in outstanding balances. In addition to asset managers, it also serves as data infrastructure that researchers and think tanks can use over time.
Even though domestic bonds are considered low risk, when the scale of management reaches JPY 75 trillion, a performance difference of just 0.01% amounts to JPY 7.5 billion. That is why detailed data is provided every day, so it can serve as a reference for benchmark-oriented bond management.
Q. What is the vision for NOMURA-BPI?
To calculate an index, we need to collect the market value of each individual security. But unlike stocks, Japanese bonds are not mainly traded on an exchange where prices are publicly available. They are mostly traded over the counter, where buyers and sellers negotiate price and trade size directly. That makes it difficult to capture the price of every bond.
In that environment, being able to provide daily evaluated market values for more than 10,000 securities is one of Nomura’s unique strengths. Nomura Securities started out as a specialized bond house, handling public and corporate bonds from the very beginning. Because of our involvement in the domestic bond market for many years, we believe NOMURA-BPI is a service that only Nomura can provide.
With that heritage in mind, we continue to review our rules in line with market changes and expand our index lineup. We will keep working to maintain and improve quality so that the index remains easy to use and trusted.
For NOMURA-BPI to continue being the leading domestic bond index, it is essential to clearly communicate the appeal and characteristics of domestic bonds. We want to keep promoting the investment value of domestic bonds.