The key Nikkei average fell back slightly Tuesday amid wariness over its recent rapid rally.
The 225-issue Nikkei average closed down 23.79 points, or 0.16 percent, at 14,758.42. The Topix index of all first-section issues dropped 1.40 points, or 0.11 percent, to end at 1,230.80.
Both indexes snapped their two-day winning streak.
The Tokyo market opened higher as export-oriented issues drew buying.
After the initial buying ran its course, however, profit-taking gained the upper hand, pulling the Nikkei average down into negative territory.
The market briefly regained momentum later on buying on dips but came under selling pressure again in the afternoon as the yen slightly rose against the dollar.
“In addition to a halt of the yen’s weakening, a surge in the yield on the key 10-year Japanese government bond made investors cautious somewhat,” said Masashi Oguchi of Mito Securities Co.’s investment information department.
The 10-year JGB yield, a benchmark for Japan’s long-term interest rates, briefly rose to 0.855 percent in interdealer trading Tuesday, up from 0.790 percent late Monday.
Some mainstay issues were pressured by selling to lock in profits partly due to a sense of overheating after their recent rapid rises, brokers said.
But losses were limited as “investors’ eagerness to buy stocks has not waned,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
Trading volume and value remained high as investment money continues flowing into the Tokyo market on the back of low interest rate policies taken by central banks around the world, brokers said.
Despite falls in the indexes, winners edged losers 832 to 782 in the TSE’s first section, while 97 issues were unchanged. Volume fell to 4.435 billion shares from Monday’s 5.300 billion.
JGB yield hits high
Japanese government bonds lost further ground in Tokyo Tuesday, sending the key 10-year yield to a nine-month high amid the continued trend of the yen’s depreciation and stock price rises.
In interdealer trading in cash JGBs, the yield on the latest 328th 10-year issue with a 0.6 percent coupon rose up to 0.855 percent, a level unseen since Aug. 17. The yield stood at 0.850 percent in late trading, up from 0.790 percent late Monday.