Stocks snapped their four-session winning streak Thursday, pressured by profit-taking after the recent gains.
The Nikkei 225 average retreated 25.46 points to end at 15,620.77. On Wednesday, the key market gauge edged 28.16 points higher. The Topix lost 2.82 points to end at 1,289.42 after rising 1.83 points Wednesday.
The Nikkei topped 15,700 at the opening after the dollar climbed above ¥103 briefly in New York overnight on better than expected U.S. gross domestic product data for April-June.
But the market’s upside was capped by selling to cash in gains, brokers said. In addition, investors waited to see scorecards from major Japanese firms as the earnings reporting season peaked Thursday.
In the afternoon, profit-taking ballooned amid a sense of overheating after the recent surge, brokers said.
Still, the market’s downside was underpinned by speculation that the Bank of Japan may have bought exchange-traded funds and the Government Pension Investment Fund may have bought stocks when the Nikkei extended losses, said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
Analysts worried that both trading volume and value remain relatively low.
There is a possibility that stock prices will fall sharply amid a shortage of energy, an official at a bank-affiliated brokerage firm said.
Meanwhile, an economic recovery and expectations for continued monetary easing in the United States are positive for Japanese stocks as they lead to a moderate rise in U.S. interest rates and the dollar’s rise against the yen, an official at a major securities firm said.
“There are hopes that the Nikkei will move around 16,000 to 16,500 in August,” Nishi said.
Losers overwhelmed winners 1,166 to 519 in the first section, while 132 issues were unchanged.
Volume swelled to 2.409 billion shares from Wednesday’s 1.943 billion.
Fujifilm lost ground, a day after the company announced its April-June operating profit that fell short of market expectations. Other technology firms, including Sony and Canon, also dropped.
Automakers Toyota and Honda closed lower though they attracted purchases in early trading on the back of the weaker yen.
Also on the minus side were game maker Nintendo, mobile carrier KDDI and electronics maker Hitachi.
On the other hand, shipping firms Nippon Yusen, Mitsui O.S.K. Lines and Kawasaki Kisen drew buybacks.
Megabank groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho were upbeat, along with brokerage firm Nomura and insurer Dai-ichi Life.