Ibiden Surges as It Joins Nikkei 225; Nidec Plunges Amid Accounting Probe

Shares of Ibiden Co Ltd (TYO:4062) soared on Tuesday after the electronics firm was officially selected to join Japan’s Nikkei 225 index, replacing Nidec Corp (TYO:6594). The announcement sparked a sharp contrast in market performance between the two companies, highlighting investor sentiment surrounding the index reshuffle and ongoing corporate governance concerns.

Ibiden’s stock jumped as much as 21% to a record high of ¥13,145, significantly outperforming the Nikkei 225, which dipped 0.2% on the day. The addition of Ibiden to Japan’s benchmark index, effective November 5, signals growing confidence in the company’s business outlook and market relevance in the electronics sector. Investors often view inclusion in the Nikkei 225 as a positive sign, given the potential for increased exposure among institutional funds that track the index.

In stark contrast, Nidec shares tumbled nearly 20% to ¥2,123.5, hitting their lowest level in six months. The electric motor manufacturer not only lost its place in the Nikkei 225 but will also be removed from other major indexes, including the Nikkei Stock Index 300 and the 500 Stock Average. The steep decline followed the company’s designation as a “security on special alert”, as the exchange called for stronger internal controls amid an investigation into alleged irregular accounting practices.

Earlier this month, Nidec also canceled a planned share buyback program due to the ongoing probe, intensifying investor concerns about transparency and financial management. The company now faces significant pressure to restore market confidence and demonstrate corrective action. Meanwhile, Ibiden’s rise underscores how index inclusion can serve as a catalyst for investor optimism and capital inflows in Japan’s equity markets.