Stocks lost ground Wednesday as investors cashed in gains after the recent strong rally.
The Nikkei 225 average lost 21.52 points to close at 14,567.16 after jumping 318.84 points Tuesday. The Topix fell 1.22 points to 1,204.19 a day after gaining 19.76 points.
Stocks came under profit-taking pressure after the Nikkei advanced 501 points, or 3.56 percent, in two days.
The key market yardstick soon erased losses to briefly turn positive thanks to buybacks. But it again sank into negative territory as the dollar took a pause from Tuesday’s sharp rise against the yen, brokers said.
Sluggish performances of Asian markets also weighed on the TSE, brokers said.
“After the weirdly strong rise in the Nikkei the previous day, the Tokyo market showed much resilience,” said Yoshihiko Tabei, chief analyst at Kazaka Securities Co.
Since there was “no particular reason” for Tuesday’s surge, which was mostly led by buying in futures, investors had expected a bigger drop Wednesday, he said, adding that the market appears to remain on a strong footing.
Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc., said technical charts are giving out signs that the Nikkei may soon break its range-bound trading and test higher ground.
On the back of lingering hopes for Prime Minster Shinzo Abe’s reflationary policy package known as “Abenomics,” continuing inflows of money from overseas investors are also seen underpinning the market, he said.
Falling issues outnumbered rising ones 931 to 685 in the first section, while 141 issues were unchanged. Volume increased to 2.677 billion shares from 2.575 billion Tuesday.
Shipping firms Nippon Yusen and Mitsui O.S.K. Lines sank, while mobile network carriers KDDI and SoftBank were hit by profit-taking after a recent rally.
By contrast, Pioneer rocketed 21.69 percent after the electronics maker posted Tuesday an operating profit for the July-September period in a turnaround from a year-before loss.
JGBs edge slightly lower
Japanese government bonds inched down in lackluster trading Wednesday.
The lead December futures contract on 10-year JGBs finished down 0.05 point from Tuesday at 144.90. Volume rose slightly to 20,182 contracts from 20,130.