Stocks retreated sharply Monday, pressured partly by profit-taking.
The Nikkei 225 average closed down 262.89 points, or 2.12 percent, at 12,135.02. On Friday, the key market gauge climbed 61.95 points.
The Topix lost 34.14 points, or 3.30 percent, to end at 1,000.57 after easing 2.07 points Friday. The Topix extended its losing streak to a third session.
The key indexes kicked off the first day of fiscal 2013 with losses due to selling to lock in profits after the market’s hefty gains in March, brokers said.
The market reacted little to the Bank of Japan’s “tankan” quarterly survey for March, which indicated a slight improvement in business sentiment, because the result had already been priced in.
According to the tankan, released just before the opening bell, the most closely watched diffusion index for large manufacturers’ current business conditions stood at minus 8, compared with minus 12 in the December tankan, showing the first pickup in three quarters.
The Nikkei and Topix accelerated their downswings in the afternoon, led by large-lot selling of stock index futures amid the yen’s appreciation against other major currencies, brokers said.
Many foreign investors, key players on the TSE, were away for Easter, brokers said.
The tankan suggested that the pace of improvement in Japanese firms’ business conditions has been slow, market sources said.
The size of pickup in large manufacturers’ DI was not impressive, said Hideyuki Suzuki, head of the investment market research department of SBI Securities Co.
Market participants also found it difficult to buy ahead of the BOJ’s closely watched two-day monetary policy meeting that starts Wednesday, the first under the stewardship of new Gov. Haruhiko Kuroda, who took office March 20, brokers said.
Falling issues outnumbered rising ones 1,630 to 63 on the first section, while 17 issues were unchanged.
Volume increased to 2.849 billion shares from Friday’s 2.595 billion.
All 33 sector subindexes of the TSE’s first section declined.
Mitsubishi Estate and rival realtor Mitsui Fudosan, and logistics companies Mitsui-Soko and Sumitomo Warehouse came under selling.
Banking groups Mizuho, Mitsubishi UFJ and Sumitomo Mitsui, and brokerage firms Nomura and Daiwa also yielded to selling pressure, as did automakers Toyota, Nissan and Honda.
Mobile phone carrier Softbank sagged amid a sense of overheating after the issue advanced for five consecutive trading days through Friday.
JGBs recoup early losses
Japanese government bonds rebounded from earlier losses in late trading Monday thanks to the tumble in Tokyo stocks.
The lead June futures contract on 10-year JGBs closed unchanged from Friday at 145.46 after briefly falling as low as 145.26 in early trading. Volume fell to 35,166 contracts from 38,938.
In late interdealer trading in cash JGBs, the yield on the latest 328th 10-year JGB issue with a 0.6 percent coupon stood at 0.560 percent, unchanged from late Friday. The yield rose to 0.590 percent at one point in the morning.