Stocks retreated Monday under pressure from weaker-than-expected economic indicators in Japan.
The 225-issue Nikkei average shed 136.47 points, or 0.69 percent, on the Tokyo Stock Exchange to close at 19,747.47. On Friday, the key market gauge lost 60.47 points.
The Topix index of all first-section issues fell 14.20 points, or 0.89 percent, to close at 1,580.25, after falling 7.87 points the previous day.
Tokyo stocks kicked off the week with losses after the Dow Jones average showed a lackluster performance in thin trading Friday after Thanksgiving Day.
Investor sentiment was also dampened by sluggish Japanese industrial production data released just before the opening bell, brokers said.
Industrial output in October rose 1.4 percent from the previous month, but fell short of the median forecast for a 1.9 percent uptick in a Jiji Press survey of 21 research institutes.
Stocks showed some resilience toward the middle of the morning thanks to buying on dips, but extended losses in the afternoon as the Shanghai stock market accelerated its downswing, according to brokers.
“I don’t think that the industrial output was bad, but the figure was not enough to make investors happy,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.
In addition, a wait-and-see mood was growing ahead of the European Central Bank’s policy-setting meeting on Thursday and the release on Friday of U.S. jobs data for November, brokers said.
In such a situation, a fall in Shanghai equities triggered selling of Tokyo stocks in the afternoon, an official of another securities firm said.
“But considering that the market’s downside was limited, investor appetite for buying on dips remained strong,” Ota said.
Investors are also waiting for the Chinese manufacturing industry purchasing managers’ indexes for November, to be released by the government and the private sector on Tuesday. But the Tokyo market is expected to be buoyed if Japan’s corporate activity survey for July-September, due out the same day, turns out brisk, if only slightly, brokers said.
Falling issues outnumbered rising ones 916 to 892 in the TSE’s first section, while 113 issues were unchanged.
Volume increased to 2.4 billion shares from Friday’s 1.8 billion.
Domestic demand-oriented names, such as retailers Seven & I Holdings and Isetan Mitsukoshi and railway operator JR East, lost ground on worries about a slowdown in the recovery of personal consumption, brokers said.
Mega-banks Mitsubishi UFJ, Sumitomo Mitsui and Mizuho were also on the minus side.
Drug makers Takeda, Shio-nogi and Eisai met with profit-taking after their recent rises.
Other major losers included automakers Toyota and Honda, as well as mobile phone carriers SoftBank Group and NTT Docomo.
By contrast, industrial robot producer Fanuc and chip-making equipment manufacturer Tokyo Electron attracted buying.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average finished down 110 points at 19,750.