Tokyo Stock Exchange
Japan has one of the world's largest economies so it should come as no surprise that it also has one of the world's most important stock exchanges. The Tokyo Stock Exchange is the major one in Japan and it has a large influence on the rest of the world. For decades the Japanese economy has been the dominant one in Asia so the Tokyo Stock Exchange has been dominant as well. This position is starting to be challenged by China however.
The Tokyo Stock Exchange is the largest in Asia and it trades the stocks of some of the largest companies in the world. The exchange was founded in 1878 in a period when Japan was going through a period of westernization. Japan was making a conscious effort to run their economy in the same way as the major European countries and that included the way that business was financed. The result was the first stock exchange in Asia. This exchange remains the largest and most important on the continent to this day, mainly because of the large companies that are traded on it.
One major difference in the way that the Japanese economy works than most other countries is that it is dominated by large companies to a much larger extent. There are not a lot of small or mid size companies competing for business it is almost always giant corporations. The result is that the Tokyo Stock Exchange trades comparatively few companies but they have a very large market capitalization. This tends to create a more stable market than you would get in other countries, although in recent years that stability hasn't been the best of things for Japan.
Over the last few years the Tokyo Stock Exchange and the whole Japanese economy have really struggled. The problem started in the nineties when the government became concerned that there was too much speculation on the market and that it was being driven up to high. The policies they implemented to slow the market down worked too well and it resulted in a large decline. This combined with a very high level of debt and interest rates that were too low caused a real slowdown in the economy and as a result a major decline the Tokyo Stock Exchange. They are just now starting to recover from an economic slowdown that has lasted for nearly two years.
Given the importance that the Tokyo Stock Exchange plays in the economy of Japan and really in the world as a whole it is widely followed by investors from around the world. The index used in this case is the Nikkei 225 which tracks the progress of the largest 225 companies on the market, mostly japanese car industry . This index is considered to be one of the most important in the world and is probably followed more than any stock index that is not based in the United States.