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Nikkei retreats modestly on profit-taking moves

JIJI

The Nikkei 225 average fell back Tuesday, pressured by profit-taking after the previous day’s surge, but investors’ continuing eagerness to buy Japanese stocks limited its loss.

The Nikkei closed down 35.53 points, or 0.31 percent, at 11,372.34. But the Topix edged up 0.92 point, or 0.10 percent, to end at 963.61.

The market got off to a weak start as the yen strengthened against other major currencies.

After the initial selling ran its course, the Nikkei average trimmed losses. But the index stayed in negative territory for most of the session, weighed down mainly by a sharp drop of industrial robot maker Fanuc, its heavily weighted component.

The yen firmed just before the opening bell after Finance Minister Taro Aso ruled out the possibility of foreign bond purchases by the Bank of Japan as part of its monetary easing measures.

“The remark weighed down the market for the rest of the day,” said Takuya Takahashi, senior market analyst at Daiwa Securities Co.

Trading was relatively thin as many market players have taken a wait-and-see stance ahead of key events later this week, including Prime Minister Shinzo Abe’s visit to the United States and Italy’s general election, brokers said.

“As the yen’s fall following the Group of 20 meeting has come to a halt, trading became directionless amid a dearth of fresh incentives ahead of such events,” said Takahashi.

But Takahashi noted that investors still have a buying appetite. “Although mainstay export-oriented stocks and financials took a breather today, some drew buying on their robust earnings or other individual factors,” he said.

While the Nikkei fell, winners far outnumbered losers 1,075 to 496 on the TSE’s first section, while 128 issues were unchanged. Volume fell to 2.687 billion shares from Monday’s 3.127 billion, marking the lowest level this year.

JGBs tweak upward

Japanese government bonds rose Tuesday, as buying took the upper hand after the Bank of Japan’s policy meeting minutes revealed discussions on an expansion in the scope of the central bank’s asset purchase program.

The lead March futures contract on 10-year JGBs finished up 0.11 point from Monday at 144.38. Volume increased to 37,692 contracts from 26,981 contracts.