The Japan All-Market Index as a Regional Economic Visualization Tool: Design Principles and Application to 3,682 Listed Japanese Companies

Conventional Japanese equity indices—the two principal Japanese equity indices, TOPIX (market-capitalization-weighted) and Nikkei 225 (price-weighted),—are widely used for investment decisions, performance evaluation, and financial product design, but their suitability as visualization tools for the regional Japanese economy has received little scrutiny. When listed companies are aggregated by their registered headquarters location, the Kanto-Koshin region accounts for approximately 71.20% of total market capitalization (FY2025 monthly average across 2025-04 to 2026-03), while contributing only 41.34% of the corresponding Gross Regional Product (GRP, sourced from the Cabinet Office of Japan's Prefectural Economic Accounts, 2008SNA/FY2021 base). This 1.72-fold structural overrepresentation implies that conventional indices systematically distort the regional reality of the Japanese economy when these indices are used to analyze regional policy. This paper introduces the Japan All-Market (JAM) Index, a quantitative framework designed to address this gap. JAM aggregates 3,682 listed Japanese companies (as of 2026Q1) into seven regions (Hokkaido, Tohoku, Kanto-Koshin, Chubu, Kinki, Chu-Shikoku, Kyushu-Okinawa), where the Kanto-Koshin classification follows the Japan Meteorological Agency's regional forecast naming convention while the other six are practical aggregations specific to this study. Regional weights are computed as the normalized geometric mean of market capitalization share and GRP ratio: JAMweight = normalize(MCap^α × GRP^(1-α)). The parameter α serves as a key adjustment parameter of the policy assessment infrastructure, with α=0.5 representing a neutral midpoint that assigns equal weighting to market valuation and real economic activity, while α=0 and α=1 recover pure GRP-based and pure market-based weights respectively. Application of JAM to the FY2025 monthly-average dataset reveals two principal findings. First, the geometric-mean correction reduces Kanto-Koshin's regional weight from 71.20% to 58.97% (α=0.5), while increasing the four non-metropolitan regions' aggregate share from 4.19% to 10.64%, restoring approximately 40% of their GRP-level share. Second, beneath the Kanto concentration lies a "Two-tier" structure: the Chubu and Kinki regions capture roughly 76% of their GRP through market valuation, whereas the four non-metropolitan regions (Hokkaido, Tohoku, Chu-Shikoku, Kyushu-Okinawa) capture only about 16%—a roughly 4.8-fold disparity. The Tohoku region's market capture ratio is approximately 1/24 of its real economic share, representing the most severe undercapture among the seven regions. These findings are positioned as a foundation for two subsequent inquiries: (1) the normative selection of α in policy applications, and (2) the limitations of headquarters-based attribution—such cases as Toyota Motor Corporation illustrate how manufacturing activity geographically distributed across Japan is attributed solely to the prefecture of the registered headquarters. Both are reserved for a forthcoming normative companion paper. Accompanying this paper is a publicly accessible interactive dashboard (https://jam-index.vercel.app), which implements an α-slider, regional bar comparison, time-series tracking of monthly capitalization shares, and a Two-tier structure display. The dashboard is intended for use by a broad audience of analysts. This paper aspires to serve as a cornerstone of the policy assessment infrastructure that visualizes the Japanese regional economy from the market side. AI assistance was used in the writing process; see the Declaration at the end of the manuscript.