The benchmark Nikkei erased earlier gains to end marginally lower Tuesday, pressured by a wave of profit-taking after a rapid four-day rally.
The Nikkei 225 closed down 0.24 point at 13,192.35. But the Topix rose for the fifth straight day, eking out a gain of 0.30 point, or 0.03 percent, to close at 1,102.04.
The Nikkei opened higher and briefly topped 13,300 for the first time since mid-August 2008 in early trading, as export-oriented issues attracted buying after the yen fell to around 99.50 to the dollar in early Tuesday trading overseas.
After the initial buying ran its course, the market’s upside was limited and the key indexes swung between positive and negative territory as investors moved to lock in profits on issued that led the recent surge.
Tokyo stocks were ripe for profit-taking as some technical indicators signaled market overheating following the rapid rally, brokers noted.
“Geopolitical risk also weighed somewhat on the market, as North Korea is said to be poised to launch a new missile,” said Yoshihiko Tabei at Kazaka Securities Co.
But Tabei said he expects the Tokyo market to remain on a firm note for the time being, noting that foreign investors’ strong appetite for Japanese stocks continues to support the market.
“Foreign investors apparently felt that selling Japanese stocks aggressively to challenge (BOJ Gov. Haruhiko) Kuroda is risky,” following the Bank of Japan’s bolder-than-expected monetary easing last week, Tabei said.
Declining issues outnumbered advancing ones 959 to 658 in the first section, while volume fell to 4.700 billion shares from Monday’s 4.955 billion.
The real estate sector, which had risen sharply, became the top loser among 33 sector subindexes of the first section, with Mitsubishi Estate and Mitsui Fudosan plunging 5.32 percent and 4.13 percent.
JGBs advance further
Japanese government bond futures gained further ground Tuesday.
The lead June contract on 10-year JGBs closed up 0.33 point from Monday at 144.67. Volume fell to 30,988 contracts from 38,663.
The yield on the latest 328th 10-year JGB issue with a 0.6 percent coupon stood at 0.530 percent in late interdealer trading, up from 0.525 percent late Monday.