On the score, the methodology, and Japan's particular market dynamics.
What does the Nikkei Fear & Greed score actually measure?
The score is a 0-100 composite of four equal-weight components: market momentum, downside volatility, USD/JPY (carry-trade pressure), and foreign investor flow. Each input is normalized via a 2-year percentile rank, so a reading of 90 means "the 90th percentile of readings we've seen in the past two years" — not "the market is 90% greedy" or anything literal. Read it as a contrarian reference point describing the market's current mood, not a forecast.
Why is USD/JPY a sentiment input for Japanese equities?
Japan's market is structurally different from most others because of the yen carry trade. Foreign investors and institutions borrow yen at low rates to invest globally — when the yen strengthens (USD/JPY falls), those positions become more expensive and get unwound, which forces selling of Japanese equities even when fundamentals haven't changed.
The August 5, 2024 crash (Nikkei -12.4% in one day, biggest single-day drop since Black Monday 1987) was driven exactly by this dynamic — a BoJ rate-hike surprise triggered a sharp yen rally and the carry trade unwound violently. USD/JPY isn't just a currency reference for Japan; it's a leading indicator of carry-unwind pressure.
How is foreign investor flow incorporated into the score?
Every Thursday around 17:00 JST, after JPX publishes its weekly Trading-by-Type-of-Investors report for the prior week, we pull the file, extract the net buy/sell value for the TSE Prime market by foreign investors, and percentile-rank it against the trailing 104 weeks (roughly 2 years). Positive (net buying) maps to a higher percentile → greed. Negative (net selling) maps to a lower percentile → fear.
Why this component matters: foreign investors account for roughly 60-70% of weekly TSE Prime trading volume, so the report captures positioning by the dominant flow source in Japanese equities. The value carries forward between Thursday publications — meaning the component is constant on Friday through Wednesday, then refreshes on Thursday.
How often does the score update?
Three of four components refresh daily, generally within a few hours of Tokyo market close (15:00 JST / 06:00 UTC). The cron pre-warms the cache at 09:00 UTC each day, so reads are instant from then on. Foreign flow updates weekly on Thursdays after JPX publishes (around 17:00 JST), with the value carrying forward between publications.
The dispersion across the four components is often more informative than the composite. Read the four cards above the chart, not just the headline number — when the inputs diverge, that's where the real signal is.
What was August 5, 2024, and how does this score capture it?
Nikkei 225 fell 12.4% on August 5, 2024 — its worst single-day drop since Black Monday 1987. The trigger was the Bank of Japan's first meaningful rate hike combined with a sharp yen rally that forced carry-trade positions to unwind globally. The S&P 500 dropped too, but the move in Japan was an order of magnitude more violent.
Our backfilled methodology scores that day as 0 (Extreme Fear) — the lowest possible reading — without any hand-coded special cases. This is validation that the methodology captures genuine market-stress events automatically. You can see the dip clearly in the historical chart above; switch to the ALL range tab and look for the trough in early August 2024.
Should I trade based on this score?
No. This is a sentiment thermometer — a normalized, easy-to-read snapshot of market mood. Extreme readings in either direction (below 20 or above 80) are worth noticing as contrarian markers, not signals to act on alone.
A score of 95 doesn't mean "sell"; it means "be aware that conditions are unusually optimistic, look for confirmation in other signals." A score of 5 doesn't mean "buy"; it means "stress is high, but stressed markets can stay stressed for a long time." This is data for context, not signals to trade. We provide no investment advice.
Why Nikkei 225 instead of TOPIX?
Nikkei 225 has the broadest international recognition, the deepest historical data series (back to 1949 via FRED), and is what most retail and global investors actually watch when they think about "Japanese stocks."
TOPIX is technically more rigorous — market-cap weighted across ~2,000 names vs Nikkei's price-weighted 225 names, where high-priced stocks like Fast Retailing have outsized influence. We lead with what international audiences track most actively.
Where does the data come from?
All data comes from
authoritative public sources, never scraped from aggregators:
- Nikkei 225 closing values: Federal Reserve Economic Data (
FRED NIKKEI225), sourced from Nikkei Inc.
- USD/JPY daily rate:
FRED DEXJPUS (Federal Reserve)
- 10-year JGB yield:
FRED IRLTLT01JPM156N (via OECD)
- BoJ policy rate:
FRED INTDSRJPM193N (via OECD)
- Foreign investor flow (when wired): JPX's official weekly publication
Is this part of a broader network of sentiment indices?