The Nikkei Stock Average is the most widely followed and most frequently quoted Japanese stock index. It earned this prominent place for several reasons:

The Average is calculated to accurately reflect the Japanese stock market. Like the Dow Jones Industrial Average, the Nikkei is price- weighted. It comprises 225 top-rated (the "bluest" chip) Japanese companies listed in the First Section of the TSE'. The component companies represent some 18% of the TSE First Section issues. The Nikkei lists some of the most widely known companies in the world: Sony, Fuji Photo Film, Honda, Toyota, Yarnaha, NEC, Citizen Watch, Nippon Telephone & Telegraph (NTT).

The Nikkei is one of the oldest Japanese stock indexes. Its calculation began simultaneously with the reopening of the TSE on May 16,1949. Its longevity is combined with historical continuity The Nikkei's component stocks are changed only because of special circumstances such as liquidations and mergers; throughout the 1980s there were only eight changes.

The Nikkei Stock Average is calculated by Nihon Keizai Shimbun, Inc. (NKS), the leading Japanese financial information services firm. During the Japanese trading day, the Average is disseminated at one- minute intervals. All changes to the Average are made by NKS. NKS is not involved in the trading of Nikkei futures and options, and acts independently in decisions regarding the Average. Because of the method of calculation, composition, historical continuity and sponsorship, most market reports quote the Nikkei when they talk about the Japanese stock market.