The following chart plots the month returns of the Nikkei 225 Index in January for the period 1980-2017.
In the 40 years from 1950 to 1989, the Nikkei 225 Index only fell in January in 6 years. After that, as can be seen in the above chart, the record became quite a bit more patchy. For example, in the 10 years since 2008, the Index has fallen over 8% in January four times.
Further analysis of the Nikkei 225 Index in January over different time periods can be seen in the following table.
In the 68 years from 1950 to 2017 the Index had an average month return in January of 2.5%, and saw positive returns in 69% of years. But since year 2000 this has dramatically changed (as was also the case of the US and UK markets). Since 2000, the Index has had an average return in January of -1.6%, the worst average return of any month in this period.
The following charts plots the cumulative returns for the 12 respective months since 1980 (for more explanation of this chart see here).
The cumulative portfolio for January has been highlighted in the above chart.
The cumulative performance of January peaked in 2001, at which point it was the best performing month in the year. Since 2001, the cumulative performance has dramatically under-performed that of other months.
This article concerns the daily returns for the Nikkei 225 from 1984.
Average daily returns
The following table shows the average return since 1984 of the Nikkei 225 Index for each day of the year. For example, over the last 30 years the average daily return for the Nikkei 225 on 4 January has been 0.38%.
In the table, positive average daily returns are coloured green, while negative average returns are coloured red. Daily returns are highlighted dark green (red) for large positive (negative) returns. (See below for the definition of large.)
- The day with the greatest number of large positive average returns is the 25th of the month.
- Five days of the month have no large positive average returns: 11th, 16th, 18th, 22nd, 24th
- The month with the greatest number of large positive average daily returns is March.
- The month with the greatest number of large negative average daily returns is September; while December is the only month with no large negative average daily returns.
- The longest period of the year with no large negative average daily returns is 20 November to 7 Jan.
Positive daily returns
The following chart is similar to the above, except this shows the proportion of positive returns for each day of the year. For example, since 1984 67% of the Nikkei 225 Index returns on 4 January have been positive.
Definition of large
Values are highlighted as large if they are more than 1 standard deviation from the average. For example, for the daily returns in the first chart the average daily return (for all days) is 0.02% and the standard deviation 0.33, so values are highlighted if they are above 0.35% (0.02 + 0.33) or below -0.31% (0.02 – 0.33).
Other daily return heatmaps.