Stocks dropped Wednesday, caught in a tug of war between buying on dips and profit-taking amid a dearth of fresh incentives.
The Nikkei 225 average fell 50.48 points to close at 15,076.08, adding to a loss of 37.74 points Tuesday. The Topix lost 3.43 points to end at 1,233.43 a day after falling 4.81 points.
The market opened higher thanks to purchases on the back of a light drop in the yen and a rise in Nikkei futures on the Chicago Mercantile Exchange.
After the initial buying ran its course, however, the key indexes pared their gains and closed the morning session slightly lower.
Still, the TSE’s downside was underpinned by buying on dips.
Mostly, the Nikkei showed small ups and downs around the previous day’s closing level in the absence of fresh incentives as well as the yen’s narrow moves around 100 to the dollar, brokers said.
A wait-and-see mood grew in the afternoon as the Bank of Japan started a two-day policy-setting meeting and a government expert panel on public pension management was scheduled to announce a report later Wednesday, brokers said.
The report was expected to include a proposal calling on the Government Pension Investment Fund to review its management policy for public pension assets.
“The dollar’s firmness around ¥100 lent support to the stock market. But at the same time, its fall below the psychologically important ¥100 capped the market’s upside,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
With several technical charts suggesting an overheating of the market, “the Nikkei will probably stay in a correction phase for one or two weeks,” Miura said.
Rising issues outnumbered falling ones 805 to 791 in the first section, while 163 issues were unchanged. Volume edged down to 2.178 billion shares from Tuesday’s 2.237 billion.
Daiichi Sankyo plunged 3.91 percent to snap its four-session winning streak as investors considered that there will be no more positive incentives for the time being after the drugmaker announced solid trial results of a new medicine, brokers said.
JGB futures turn south
Japanese government bond futures turned lower Wednesday amid a lack of fresh incentives.
The lead December contract on 10-year JGBs ended down 0.05 point from Tuesday at 144.91. Volume fell to 18,833 contracts from 25,801.