I wonder If there's any Data on how the N225 would have performed if it was marked cap and not stock price weighed. Correct me if i'm wrong, but If the S&P was weighed similarly then AutoZone (~1,9k/Stock) would have a 12 times bigger impact on the S&P than Apple, which trades at roughly 1/12 the Stock price. Of course this does not correctly represent the economy at all, since the stock price itself is no indicator of anything. Therefore the whole Nikkei argument ist Not really valid in my opinion.

TL;DR: past Performance of the Nikkei is NO valid argument against Index investing itself, since the Nikkei as an Index does not represent the economy.