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Profit-taking continuing to weigh down Nikkei

JIJI

Stocks lost ground Wednesday, weighed by continued profit-taking after recent gains.

The Nikkei 225 average lost 65.61 points to end at 15,449.63. On Tuesday, the key market gauge shed 103.89 points.

The Topix closed 5.94 points lower at 1,247.08 a day after losing 6.59 points.

Stocks got off to a weak start as investors continued to take profits out of concern about overheating. The Nikkei shot up more than 1,500 points in the two weeks through Monday, when it rose to near its closing high for the year.

“The Nikkei’s attempt to reach a new year-to-date closing high has been put on hold for now,” an official at a bank-affiliated brokerage said. The key index stayed in negative territory throughout Wednesday.

In midafternoon trading, the Nikkei came close to its previous day’s finish thanks in part to a drop in the yen against the dollar and the euro from highs in the morning. Toward the close, however, the TSE came under renewed selling.

“There is a view among players that declines in Tokyo stocks will likely prompt buying on dips as global financial markets are flooded with massive amounts of cash,” the bank-affiliated brokerage official said.

Although the yen is taking a pause after a recent sharp drop, the currency is still weaker than the levels assumed by major Japanese exporters as the basis for their earnings estimates for the current business year.

Stocks will thus likely be supported by expectations for upward revisions in exporters’ earnings projections, a market source indicated.

A wait-and-see mood is growing ahead of the Thanksgiving holiday in the United States on Thursday and the following day, known as Black Friday, when the Christmas shopping season kicks off, Ryuta Otsuka, a strategist at Toyo Securities Co., said.

Falling issues exceeded rising ones 1,071 to 552 on the first section, while 134 issues were unchanged.

Volume fell to 2.167 billion shares from Tuesday’s 2.485 billion.

JGBs move higher

Japanese government bonds rose Wednesday, helped by a rise in U.S. Treasury securities overnight and a smooth auction of new 40-year JGBs the previous day.

The lead December futures contract on 10-year JGBs ended up 0.13 point at 145.08. Turnover increased to 25,038 contracts from Tuesday’s 24,205.