Stocks turned lower Tuesday, pressured by profit-taking amid the yen’s strengthening against other major currencies.
The Nikkei 225 closed down 38.72 points at 13,529.65. On Monday, the key market gauge surged 251.89 points.
The Topix slumped 1.82 points to end at 1,143.78 after rising 18.93 points Monday.
Despite an overnight rise on Wall Street, the TSE was hit by selling from the outset on the yen’s appreciation against the dollar and the euro, brokers said.
After briefly popping up into positive territory, aided by buybacks and buying on dips, the Nikkei fell into minus territory again as the market was affected by worse than expected readings of the HSBC China manufacturing purchasing manager’s index for March, brokers said.
Investor sentiment was also dampened by lackluster performances of other Asian equities, such as China, they said.
Overall trading lacked direction as investors found it difficult to move before a number of major Japanese companies will release their earnings results for their previous business year and their forecasts for the current year later this week, brokers said.
Still, “investors’ buying appetite is strong” as they actively bought small-capitalization and low-priced shares, said Masayuki Otani, chief market analyst at Securities Japan Inc.
Market participants sold issues that had attracted buying interest, such as realtors and banking groups, and bought those that had pulled out of a temporary correction phase, Otani said.
Rising issues outnumbered falling ones 937 to 660 on the first section, while 116 issues were unchanged.
Volume slightly decreased to 4.348 billion shares from Monday’s 4.419 billion.
Realtors Mitsui Fudosan, Sumitomo Realty and Mitsubishi Estate were downbeat, along with Mitsubishi UFJ, Sumitomo Mitsui and Mizuho.
JGBs up on weak data
Japanese government bonds strengthened Tuesday, helped by weaker than expected U.S. housing data.
The lead June contract on 10-year JGBs finished up 0.33 point from Monday at 144.67. Turnover increased to 19,330 contracts from 15,864.
In late interdealer trading in cash JGBs, the yield on the latest 328th 10-year issue with a 0.6 percent coupon stood at 0.585 percent, down from 0.610 percent late Monday.