The benchmark Nikkei average fell back Tuesday, dragged down by bouts of profit-taking prompted by the yen’s rebound.
The 225-issue Nikkei ended down 103.89 points, or 0.67 percent, at 15,515.24, falling for the first time in four market days. The Topix index of all TSE first-section issues lost 6.59 points, or 0.52 percent, to finish at 1,253.02. It closed lower also for the first time in four sessions.
Stocks came under selling pressure from the outset as the yen’s firming sapped investor confidence in export-oriented issues, such as automakers, and other mainstay stocks, and triggered moves to lock in profits, brokers said.
Investors also grew wary of the market’s overheating following the Nikkei’s recent rapid ascent, an official at a bank-affiliated brokerage said.
Players also moved to square their positions toward the end of the month, the official added.
But Tuesday’s slide in the Nikkei will likely “prove a temporary correction after its recent upswing,” another market source said, suggesting the Tokyo market is being supported by overseas markets’ strong performances.
The key market yardstick lost about 158 points shortly after the opening. But it gradually trimmed part of the loss thanks in part to steady demand for some mainstay issues, the source added.
The environment surrounding the Tokyo market is good, said Masashi Oguchi at Mito Securities Co.’s investment information department. While the market was hit by some profit-taking, foreign investors continued to increase their positions, supporting the market’s downside, he said.
With the U.S. Dow Jones industrial average and S&P 500 index, and Germany’s benchmark DAX index all hitting record highs recently, foreigners will likely continue buying Japanese stocks on hopes for their further growth potential, Oguchi said.
Falling issues led rising ones 976 to 670 on the TSE’s first section, while 115 issues were unchanged. Volume fell to 2.485 billion shares from 2.531 billion Monday.
Japanese government bonds bounced back Tuesday as investors took heart from a solid auction of a new 40-year JGB issue.
The lead December futures contract on 10-year JGBs ended up 0.24 point at 144.95.
Turnover ballooned to 24,205 contracts from Monday’s 18,343.