The Nikkei 225 average turned slightly lower Monday, hurt by selling to cash in gains after the recent rapid gains.
The key index dropped 1.62 points to close at 15,164.30. On Friday, the key market gauge shot up 289.51 points to finish above the 15,000 line for the first time in nearly six months.
But the Topix climbed 2.63 points to end at 1,241.67 after advancing 20.49 points Friday.
The TSE kicked off the week with gains after the Dow Jones industrial set a record closing high for the third session in a row Friday amid hopes that the U.S. Federal Reserve’s quantitative easing will be maintained for an extended period.
The Nikkei, however, soon slipped into minus territory, pressured by profit-taking as the key market yardstick surged more than 1,000 points, or over 7 percent, last week.
After the selling ran its course, stocks climbed higher, underpinned by buying on dips and buybacks on the back of the yen’s stability past 100 to the dollar, brokers said.
In the afternoon, the Nikkei fell into negative territory again due chiefly to a renewed bout of selling to lock in profits prompted by the yen’s slight rise, brokers said.
The market’s downside was propped up by hopes for further fund inflows into risk assets thanks to the Fed’s policy, brokers said.
Buying centered on mega-bank groups and nonbank lenders.
Still, mainstay export-oriented names, including automaker Toyota and robot maker Fanuc remained sluggish despite the weaker yen.
“Behind their lackluster performance were investor worries about whether the dollar will continue moving above ¥100,” said Takuya Takahashi, senior market analyst at Daiwa Securities Co.
“Additional incentives, such as a further easing of the yen, are necessary if the Nikkei average is to test its upside,” said Hiroaki Hiwada, senior strategist at Toyo Securities Co.
Rising issues outnumbered falling ones 809 to 789 in the first section, while 160 issues were unchanged.
Volume decreased to 2.840 billion shares from 3.207 billion.
In the financial sector, nonbank lenders Aiful and Orient enjoyed handsome gains. Brokerage firm Nomura and bank groups Sumitomo Mitsui and Mitsubishi UFJ were upbeat, bolstered by hopes for an improvement in their earnings amid expectations for continued monetary easing by the Fed, brokers said.
Sanitary goods maker Unicharm soared 4.15 percent on expectations for growth in demand after China announced a decision late last week to ease its one-child policy, brokers said.
Japanese government bond futures bounced back Monday on buybacks, thanks partly to the drop in Tokyo stocks.
The lead December futures contract on 10-year JGBs closed up 0.11 point from Friday at 144.77. Volume rose to 31,533 contracts from 29,948.
In late interdealer trading in cash JGBs, the yield on the latest 331st 10-year issue with a 0.6 percent coupon stood at 0.630 percent, unchanged from late Friday.
JGBs were weaker in early morning trading.