Nikkei 225 Currency Hedged Indexes
Index Guidebook

Nikkei Inc.
・This document is the index guidebook of the Nikkei 225 Currency Hedged Indexes
calculated and published by Nikkei Inc. (Nikkei). The document is drawn up by
Nikkei and it would be changed or modified corresponding to the revision of theindex calculation rule etc.
・ Copyright of this document is owned by Nikkei, and any copies, reprints andreproduction of this document are prohibited without the prior approval ofNikkei. This document is prepared solely for the understanding of the index that
Nikkei calculates and publishes, and it is not to be construed as a solicitation or
an offer to buy or sell any securities or related financial instruments.
・ This English document is a translation of the original document in Japanese andmay not be an entirely accurate translation of the original Japanese document. In
any case where differences arise between the English version and the originalJapanese version, the original Japanese document will prevail.

(December 8, 2014 version)

GB-NCH-E-20141208

1: Concept
The Nikkei 225 Currency Hedged Indexes measure the return of the Nikkei Stock
Average (Nikkei 225) by hedging its currency risk 100% for investors outside Japan,i.e. non-Yen investors. These indexes represent the mixed positions of the Nikkei 225
investment in other currencies than JPY, and the relevant currency hedgedtransactions. Nikkei 225 Currency Hedged Indexes are based on the Nikkei 225 andNikkei 225 Total Return Index. The currencies are USD and Euro.
Suppose that the Nikkei 225 increased 10% while the exchange rate of Yen against ahome currency of an investor depreciates 10%. The return from such investment isalmost zero for such non-Yen investor offset by the loss from the yen long position. If
the currency risk was eliminated, the investor could receive 10% return minus thecurrency hedge cost.
The Nikkei 225 Currency Hedged Indexes are designed to be used to measure theperformance of such currency risk hedged investments.

2: Index names( 1 ) General term
Nikkei 225 Currency Hedged Indexes(2) Individual indexes
Nikkei 225 USD Hedged Index
Nikkei 225 EUR Hedged IndexNikkei 225 Total Return USD Hedged Index
Nikkei 225 Total Return EUR Hedged Index

3: Index Calculation(1) Basic points
・ The Index value is calculated by using the close of Nikkei 225 or Nikkei 225 Total
Return Index, and the Spot rate and 1-month Forward rate of the targeted currency(rates of Japanese Yen (JPY) to the targeted currency).
・ The Indexes use the WM/Reuters Spot rate and 1-month Forward rate (middle priceof bid and ask) of the targeted currency at 4pm, London Time. In case that the rates
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are not available on a day of index calculation, e.g. holiday of the London market,
the rates used for the latest valid calculation of the index will be used on the day.
・ The Index value on a day is calculated by multiplying the index value on the end of
the previous month by (1) the return of the Nikkei 225 from the end of theprevious month, (2) the return of the spot currency rate from the end of theprevious month, and (3) the currency hedge return from the end of previous month,respectively. The hedge ratio of the targeted currency is 100%.
・ Unit of the index value is “point” and the figure is rounded to two decimal places.
・For the Nikkei 225 based indexes, index value of the base date (September 30, 2004)
was 10,823.57. For the Nikkei 225 Total Return Index based indexes, the value ofthe base date was 13,519.22.
・ These indexes are calculated and published on the end-of-day basis by 2 pm, Tokyo
Time on the next business date.
(2) Formula
The Nikkei 225 Currency Hedged Indexes are calculated in accordance with thefollowing formula.

225
225
1where・ S : Spot rate of the targeted currency
・ F : 1-month Forward rate of the targeted currency
・ t : Date of index calculation (calendar day basis, in case t=0 as the last business
day of previous month, i.e. S 0 or F 0 )・ M : Number of calendar days in the month including the day of the index
calculation (in case of February on leap year, M=29)*1) LIF : the theoretical value of the Forward rate for the end of month calculated
by a linear interpolation of Spot rate and 1- month Forward rate on the day ofindex calculation.
*2) In case of the calculation for the Nikkei 225 Total Return USD Hedged Index
and the Nikkei 225 Total Return EUR Hedged Index, please replace the “Nikkei225” on the formula described above with the “Nikkei 225 Total Return Index”.

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4: Calculation Example (in case of Nikkei 225 USD Hedged Index)*Following calculation is for illustration purposes only. Spot and forward rates
are hypothetical as well as the index value.
(Example.1) Calculation on Dec 30, 2013 (Last business day of month): Last
business day of previous month was Nov 29, 2013.
・ Nikkei 225 USD Hedged Index Nov 29 = 16,779.71
・ Nikkei 225 Nov 29 = 15,661.87
・ Nikkei 225 Dec 30 = 16,291.31
・ USD Spot Rate Nov 29 = 102.365
・ USD Spot Rate Dec 30 = 105.035
・ USD Forward Rate Nov 29 = 102.3343
・ USD Forward Rate Dec 30 = 105.0185
Nikkei 225 USD Hedged Index Dec 30＝ 16,779.71 × ((16,291.31/15,661.87) × (102.365/105.035)+(102.365/102.3343-102.365/(105.035+(1-30/31)×(105.0185-105.035))))＝ 17,441.8838… ≈ 17,441.88(Example.2) Calculation on Jan 6, 2014 (Beginning of month): Last business dayof the previous month was Dec 30, 2013.
・ Nikkei 225 USD Hedged Index Dec 30 = 17,441.88
・ Nikkei 225 Dec 30 = 16,291.31
・ Nikkei 225 J an 6 = 15,908.88
・ USD Spot Rate Dec 30 = 105.035
・ USD Spot Rate Jan 6 = 104.525
・ USD Forward Rate Dec 30 = 105.0185
・ USD Forward Rate Jan 6 = 104.5100
Nikkei 225 USD Hedged Index Jan 6＝ 17,441.88×((15,908.88/16,291.31)×(105.035/104.525)＋(105.035/105.0185-105.035/(104.525+(1-6/31)×(104.5100-104.525))))＝ 17,031.1549… ≈ 17,031.15

5: Treatment of the index value( 1) Retroactively Calculation in the past
The Nikkei 225 Currency Hedged Indexes are to be calculated retroactively back tothe base date of September 30, 2004 on the end-of-day basis.

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( 2) Modification of the index value
In the case the Nikkei Stock Average (Nikkei 225) is modified retroactively, Nikkei225 Currency Hedged Indexes may also be modified retroactively.

6: Others(1)Index License
The Nikkei 225 Currency Hedged Indexes are the copyrighted materials calculated ina methodology independently developed and created by Nikkei Inc. (“Nikkei”) andNikkei is the sole exclusive owner of the copyright and other intellectual property
rights in the Nikkei 225 Currency Hedged Indexes.
Commercial use of the Nikkei 225 Currency Hedged Indexes must be licensed byNikkei. Such uses include, but not limited to, provision of derivative products suchas futures and options, creation and marketing of linked funds or linked securities, ordistribution of the index for the data and analytic services. Also in case of using theindex for creation of Exchange Traded Fund listed on the London Stock Exchange, alicense may not be granted for a certain period of time after the index is launchedbecause a company that provided advices in developing the indexes is given priority
to use them for the specific purposes.
(2)Disclaimer
Nikkei has no obligation to publish the Nikkei 225 Currency Hedged Indexes
continuously, and Nikkei is not responsible for any error, delay or omission in theNikkei 225 Currency Hedged Indexes. Nikkei is entitled to change the details of theNikkei 225 Currency Hedged Indexes and to suspend or stop the calculation and theannouncement thereof.
Although, in principle, the Nikkei 225 Currency Hedged Indexes are calculated andmaintained in accordance with the information provided here, Nikkei has discretion
to take measures that Nikkei deems appropriate when the events which are notcovered in this document happen or under the circumstances where it is difficult tocontinue to calculate the indexes using the current rules. The specifications describedmay be amended without notice. Nikkei does not assume any loss or damage causedby the use of this document.
In addition, the disclaimers in the above are also applied to Nikkei Stock Average(Nikkei 225) which is used to calculate the Nikkei 225 Currency Hedged Indexes.

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5This English document may not be an entirely accurate translation of the originalJapanese document. In any case where differences arise between the English version
and the original Japanese version, the original Japanese document will prevail.
WM/Reuters Closing Spot and Forward Rates are provided by The World Markets
Company plc (“WM”) in conjunction with Reuters. WM shall not be liable for anyerrors in or delays in providing or making available the data contained within thisservice or for any actions taken in reliance on the same, except to the extent that thesame is directly caused by its or its employees’ negligence.
(3)ContactIndex Business Office, Nikkei Inc.
Tel: +813-6256-7341, mail: index@nex.nikkei.co.jp

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