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Nikkei suffers amid profit-taking, surging yen

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JIJI

Stocks fell Tuesday, weighed down by profit-taking after Monday’s sharp gains and a rise in the yen.

The Nikkei 225 average closed down 70.06 points at 14,325.98 after shooting up 307.85 points Monday. The Topix lost 4.86 points to end at 1,193.50 a day after gaining 20.08 points.

The TSE declined as Monday’s rally prompted investors to lock in profits. Also, the yen’s appreciation against major currencies dragged down main issues, brokers said.

Before the weak finishes, however, the main indexes briefly recouped their losses on buybacks spurred by an injection by the Chinese central bank into the money market, the first time in two weeks, soothing fears over possible credit-tightening in China, they said.

The market later came under renewed selling pressure on drops in other Asian markets, brokers said.

While mainstay issues came under profit-taking pressure, investors hunted for small-cap firms that have reported good earnings for the half-year to September, an official at a bank-affiliated brokerage said.

“Trading was mostly selective based on individual earnings reports,” said Ryuta Otsuka, a strategist at Toyo Securities Co.

Market players in general refrained from active trading ahead of key events this week, including monetary policy meetings of the U.S. Federal Reserve and the Bank of Japan, he said.

Still, the market was supported by hopes for additional positive earnings reports, brokers said. Players have speculated that the BOJ will support the market’s downside by buying exchange-traded funds, they said.

Falling issues outnumbered rising ones 1,071 to 566 in the first section, while 115 issues were unchanged. Volume increased to 2.903 billion shares from 2.321 billion Monday.

Construction machinery maker Komatsu dived 8.06 percent after the company lowered its earnings estimates for the current business year to March.

Kawasaki Heavy Industries plunged 5.78 percent on disappointing full-year earnings estimates, which were kept unchanged and below the market’s consensus.

Japanese government bonds edged higher Tuesday thanks partly to weaker Tokyo stocks.

The lead December futures contract on 10-year JGBs closed up 0.09 point from Monday at 144.92. Volume rose to 13,638 contracts from 8,386 contracts.