The benchmark Nikkei average fell back Monday as the market faced profit-taking after the index briefly retook 11,000 in early trading for the first time in almost 33 months.
The 225-issue Nikkei opened at 11,002.86, its first reading above the 11,000 barrier since April 30, 2010.
With the figure proving Monday’s high, however, the key market gauge soon began to lose steam and closed down 102.34 points, or 0.94 percent, at the day’s low of 10,824.31.
On Friday, the Nikkei soared 305.78 points.
The Topix index of all first-section issues dropped 3.31 points, or 0.36 percent, to end at 913.78, also the day’s low, after gaining 19.47 points the previous trading day.
Both indexes marked their first declines in three sessions.
The Tokyo market got off to a firm start following gains in U.S. equities Friday and the yen’s further weakening.
But mainstay export-oriented issues soon came under selling pressure partly because investors got a sense of achievement with the Nikkei’s rise above 11,000 and due to a pause in the yen’s decline, brokers said.
After ending the morning session modestly lower, the Nikkei expanded its losses in the afternoon, led by a fall in index futures, they said.
In overseas currency trading Friday, the dollar briefly rose above ¥91 to hit the highest level since June 2010. The euro also climbed above ¥122.50 to mark a 21-month high.
But both the U.S. and European currencies became top-heavy somewhat against the yen in Tokyo trading Monday.
“As the yen’s decline has come to a pause, investors turned to lock in profits ahead of the releases of a string of corporate earnings reports in Japan, and key economic indicators and events overseas this week, including the U.S. Federal Reserve’s two-day policy-setting meeting from Tuesday,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
The Nikkei average was dragged down partly by a tumble of industrial robot maker Fanuc, a heavily weighted component, brokers said.
Still, Nishi indicated that Monday’s decline was good for the market’s adjustment after its recent rapid rally.
The market continues to be supported by hopes for an improvement in Japanese companies’ earnings for the next business year amid the yen’s weakness and for a U.S. economic recovery, he added.
Decliners outnumbered advancers 978 to 600 on the TSE’s first section, while 118 issues were unchanged. Volume fell to 3.072 billion shares from Friday’s 3.336 billion.
Fanuc plummeted 7 percent after the company Friday revised down its earnings projections for the year through March.
Semiconductor-related Advantest fell 5.3 percent and Shin-Etsu Chemical 2.66 percent, respectively. Tokyo Electron was also downbeat.
JGBs fall back
Japanese government bonds fell back Monday after increasing risk appetite helped push up stocks and drive down bond prices overseas Friday.
The lead March futures contract on 10-year JGBs finished down 0.25 point from Friday at 144.30. Volume rose to 37,476 contracts from Friday’s 33,895.