<p>The Tokyo Price Index (TOPIX) is a stock market index that tracks the performance of all companies listed on the Tokyo Stock Exchange (TSE), excluding those in the Japan Exchange Group's Mothers market. It is a market capitalization-weighted index, meaning larger companies have a greater influence on its movements.</p>

<h2>How It Works</h2>
<p>The TOPIX is calculated using the following formula:</p>
<ul>
  <li>TOPIX = (Sum of the market capitalization of all constituent stocks) / (Sum of the market capitalization of all stocks listed on the TSE, excluding Mothers market)</li>
</ul>
<p>Market capitalization is calculated as the product of a company's stock price and the number of shares outstanding. The index is rebalanced quarterly to ensure it remains representative of the overall market.</p>

<h2>Why It Matters</h2>
<p>The TOPIX is a key indicator of the Japanese stock market's health and is widely followed by investors both domestically and internationally. It provides a snapshot of the overall performance of the Japanese economy, as the companies listed on the TSE account for a significant portion of Japan's GDP. For example, a rise in the TOPIX often signals investor confidence in the Japanese economy, while a decline may indicate uncertainty or pessimism.</p>