Nikkei 225 vs S&P 500
The longest window on the site, and the one case where a major index spent more than thirty years below its high. The Nikkei 225 peaked at the end of December 1989; it would take until 2024 to regain that level in yen. The S&P 500, over the same span, suffered two major crashes and erased both.
Over the period both series share, Nikkei 225 comes out ahead at +6.7% a year.
| Asset | Total return | Annualised | Volatility | Largest drawdown |
|---|---|---|---|---|
| Nikkei 225 | ×54.3 | +6.7% a year | 20.8% | −76.0% (May 2003) |
| S&P 500 | ×41.6 | +6.2% a year | 18.0% | −69.2% (March 2009) |
Figures calculated on 26/10/2026 from monthly closing prices. Past performance is no guide to future performance.
Two indices, two ways of counting
The Nikkei 225 weights its members by share price, exactly as the Dow Jones does: an expensive share counts heavily regardless of the size of the company behind it. The S&P 500 weights by free-float capitalisation, that is, by each company’s actual economic weight.
The comparison is therefore as much about two ways of measuring a market as about two markets. Japan also publishes a capitalisation-weighted index, the TOPIX, whose profile over the same years differs noticeably from the Nikkei’s.
December 1989, and what the curve does not say
The peak at the end of 1989 closes a bubble in Japanese shares and property with no equal in a developed economy. What follows is not a crash but a long erosion, broken by recoveries. Thirty-four years separate that high from the day it was passed — longer than most people’s saving lives.
Two caveats. Those thirty-four years are counted in yen and before dividends: an investor who had reinvested the dividends paid over the period would have recovered their stake appreciably sooner, which two price indices cannot show.
And the curve here is converted into euros. For a European saver, the yen’s recent weakness is added to the Japanese result, while the S&P 500 is itself affected by the dollar. The recovery dates you can read off this chart are not the ones quoted in the Japanese press.
Which leaves a surprising result: over the window shown, the Nikkei wins. It opens in 1965, and the twenty-four years of ascent before the peak outweigh the three decades of convalescence after it. Nothing illustrates better how much a starting date decides a comparison — move it to January 1990 with the period selector and the ranking reverses.
Frequently asked questions
Why does the Nikkei win, then?
Because the comparison opens in 1965, well before the bubble. The Japanese climb through the 1970s and 1980s was steep enough to offset the stagnation that followed. Over a window starting in 1990, the verdict is the opposite.
Did the Nikkei really take thirty-four years?
In yen and before dividends, yes: December 1989 to 2024. With dividends reinvested the wait was considerably shorter. It is the clearest illustration of what a price index can make you believe.
Why is the comparison in euros?
Because the two assets do not quote in the same currency. What is shown is therefore the result for a euro-zone saver, yen and dollar moves included.
Why go back to 1965?
It is the first day on which both of the series available to us quote together. The comparison always starts there, so as not to extend the younger of the two artificially.