Stocks fell back Monday, pressured by profit-taking after their recent rapid rally.
The 225-issue Nikkei average closed down 89.10 points, or 0.83 percent, at 10,599.01. On Friday, the key market gauge surged 292.93 points.
The Topix index of all first-section issues eased 7.45 points, or 0.84 percent, to end at 881.06, after soaring 28.71 points the previous trading day.
Both indexes snapped their five-day winning streak.
The Tokyo market opened higher following gains in U.S. equities and the yen’s fall against the dollar late last week. But the Japanese stock indexes erased their gains gradually to sink into minus territory, led by index futures partly due to a pause in the yen’s decline.
“As some technical indicators signal the Tokyo market has been overheating after the consistent rally over the past 1½ months, market players moved to lock in profit for now amid a dearth of fresh incentives,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
But selling pressure was not strong, as many market players still expect the yen’s weak trend to continue on hopes for economic policies to be taken by Japan’s new administration, brokers said.
“Mainstay issues took a breather for today, while some defensive and lagging sectors drew buying,” Nishi said, adding that small-capitalization and low-priced stocks were top gainers Monday.
Market watchers believe the Tokyo market will be supported by foreign investors who are expected to continue buying Japanese stocks until they see concrete policies by the new administration.
Despite the declines in the key indexes, winners edged losers 838 to 763 in the TSE’s first section, while 95 issues were unchanged.
Volume rose to 3.531 billion shares from Friday’s 3.409 billion.
Brokerage Nomura tumbled 4.96 percent, after shooting up more than 50 percent during its 13-session winning streak until Friday. Industry peers fell sharply across the board.
Aozora Bank plummeted 10.07 percent after a media report that U.S. private-equity firm Cerberus, the bank’s largest shareholder, plans to sell most of its stake in the Japanese lender by the end of January.
Also on the minus side were paper manufacturers Oji and Nippon Paper, power utility Kansai Electric and electronics maker Sharp as well as industrial robot maker Fanuc.
By contrast, retailer Seven & I soared 5.06 percent, while Fast Retailing gained 2.75 percent.
Other major winners included Japan Tobacco, contractor Haseko and drug maker Shionogi.
JGBs firm up
Japanese government bonds moved on a firm note Monday, supported by buying stemming from the Nikkei stock average’s fallback after a five-day rally.
The lead March futures contract on 10-year JGBs gained 0.12 point from Friday to end at 143.44. Turnover increased to 30,295 contracts from 26,847.
In late interdealer trading in cash JGBs, the yield on the latest 326th 10-year issue with a 0.7 percent coupon stood unchanged from late Friday at 0.835 percent.