Tokyo Stock Exchange to trim Topix constituents by about 40% by 2028
The Tokyo Stock Exchange will reduce the number of stocks in the Topix index from roughly 1,600 to under 1,000, cutting about 40% of its constituents.
The Tokyo Stock Exchange announced a major overhaul of the Topix benchmark, aiming to cut its constituent list by roughly 40 percent, bringing the total below 1,000 from one outlet around 1,600. Starting Oct. 30, the weighting of 683 existing stocks will be reduced on a quarterly basis, while 35 new firms such as McDonald's Holdings Co. (Japan) and Toei Animation Co. will be added. A reassessment in October 2027 will identify stocks that fail to meet the updated criteria, and those will be fully removed by the end of July 2028.
The index composition will be determined using factors like market cap and trading volume, and will undergo an annual review beginning in October 2028. This restructuring follows the 2022 market reorganization that shifted many First Section listings to the new Prime Market.
Why it matters
The change could reshape investment flows into Japanese equities by making the Topix more selective and liquid.
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