The Nikkei 225 lost ground Tuesday as mainstay export-oriented issues came under selling pressure due to the yen’s rise.
The average closed down 23.27 points at 13,860.86. On Friday, the key market gauge slipped 41.95 points. The market was closed Monday for Showa Day.
The Topix bounced back 3.94 points to end at 1,165.13 after dropping 11.59 points Friday.
Despite overnight gains in overseas markets, the Nikkei opened lower, pressured by losses in the stocks of some exporters such as major automakers and electronics makers after the yen rose past 98 to the dollar in overseas trading.
After falling more than 100 points in early trading, the key market yardstick showed resilience and briefly rebounded into positive territory.
“Hopes for further rises in U.S. equities provided support for the Tokyo market and helped the Nikkei recover on buybacks,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co. On Wall Street, the S&P 500 rewrote its all-time closing high and the Nasdaq ended at a 12-year high on Monday.
But the TSE’s upside was capped partly by the firmer yen, which traded above 98 to the dollar for the most of the session.
In addition, some market watchers noted that market players were reluctant to chase higher prices actively in the middle of Golden Week and ahead of key events abroad, such as a U.S. Federal Reserve policy-setting meeting.
“Depending on moves on Wall Street after these events, however, the Nikkei average could test 14,000 later this week,” Miura said.
In coming weeks, many Japanese listed companies are scheduled to release their earnings reports for the year that ended in March and forecasts for the current business year.
“The market is expected to react to individual earnings news, as it did today,” Miura said.
Japanese government bonds lost ground Tuesday, weighed down by position-adjustment selling prior to closely-watched events.
The lead June contract on 10-year JGBs closed down 0.12 point from Friday at 144.53. Volume decreased slightly to 16,023 contracts from 16,676.
In late interdealer trading in cash JGBs, the yield on the latest 328th 10-year issue with a 0.6 percent coupon stood at 0.605 percent.