The Japan Index is a modified price-weighted index that measures the aggregate performance of 2 10 common stocks actively traded on the Tokyo Stock Exchange that are representative of a broad cross section of Japanese indices. The Index, denominated in U.S. dollars, is calculated once a day and disseminated before the opening of trading based on closing prices of the component stocks on the Tokyo Stock Exchange.

The Japan Index is designed to track the performance of highly capitalized stocks traded on T Stock Exchange (TSE). The 2 10 component stocks of the Index represent Japan's major economic sectors and cover such areas as electronics, heavy industry, consumer products, utilities, oils, automobiles, railroads, pharmaceuticals and financial services. A list of the stocks in the Index at any given time is available from the American Stock Exchange. The Index is a modified, price-weighted index where changes in the Index value correspond to changes in the share prices of JPN's component stocks.

Developed by the Amex, this broad-market Index very closely mirrors the Japanese bluechip market and has a greater than 99% correlation with the Nikkei Stock Average, Japan's bellwether market index. The Japan Index's responsiveness is further emphasized by its approximate 1: 100 price relationship to the Nikkei Average - which means that JPN should move about one point for every 100 point move on the Nikkei. JPN was set at a benchmark value of 280.00 on April 2, 1990.

Denominated in U.S. dollars, the value of the Japan Index is determined based on a valuation method in which stock prices in Japanese yen are stated in dollar terms. Under the valuation method, 100 yen is assigned the value of one dollar. Thus, if the aggregate price of JPN's component stocks is 30,500 yen, the Index value will be 305 in dollars. This assures that the Index value will not be affected by fluctuating yen/dollar exchange rates. The Index is calculated once a day, based on closing prices of the Index's component stocks on the Tokyo Stock Exchange, and is disseminated by the Amex before the opening of trading.