Stocks turned lower on the Tokyo Stock Exchange on Tuesday, pressured by selling to lock in gains after recent surges.
The Nikkei lost 114.55 points, or 0.64 percent, to close at 17,750.68. On Monday, it rose 346.93 points.
The Topix ended down 10.63 points, or 0.73 percent, at 1,452.04, after climbing 30.60 points the previous day.
The Tokyo market opened weaker after U.S. equities lost ground on Monday, with investor sentiment dampened by a sharp drop in crude oil futures prices.
Profit-taking weighed down Tokyo stocks after the Nikkei surged over 800 points, or more than 4 percent, in the past two sessions following the Bank of Japan’s decision to adopt a negative interest rate policy, brokers said.
Stocks showed some resilience later in the morning session thanks to buying on dips on hopes for further rises in stock prices, but retreated in the afternoon in line when the yen strengthened.
Banks attracted buybacks after falling on worries about deteriorated earnings stemming from the BOJ decision to apply an interest rate of minus 0.1 percent to some of commercial banks’ current account deposit at the BOJ.
By contrast, stocks that stand to benefit from the central bank’s move, such as realtors, met with selling to lock in gains after their recent surges.
“Today’s fallback does not mean that the positive impact of the BOJ’s additional monetary easing has disappeared,” an official of a bank-affiliated securities firm said. “Stocks retreated after rising dramatically.”
The market was also weighed down investor caution ahead of the release this week of earnings reports from major Japanese companies and U.S. economic data, said Hiroaki Hiwada, strategist at Toyo Securities Co.
“I believe that if such economic data as new auto sales in the United States turn out to be brisk, stocks will rebound,” Hiwada said. “But it is expected to be difficult for the market to stage an upsurge unless a major positive factor comes out prior to U.S. Federal Reserve Chair (Janet) Yellen’s congressional testimony slated for Feb. 10.”
Falling issues outnumbered rising ones 1,246 to 606 in the TSE’s first section, while 83 issues were unchanged.
Volume fell to 2,771 million shares from Monday’s 3,502 million shares.
The yen’s rise battered automakers Toyota, Fuji Heavy and Mazda, along with iPhone parts suppliers, such as Murata Manufacturing and Alps Electric.
Realtors Mitsui Fudosan and Sumitomo Realty also met with selling after their recent sharp rises.
Other major losers included oil companies JX Holdings and Inpex, steel-maker JFE Holdings, mobile phone carriers Softbank Group and NTT Docomo and clothing store chain operator Fast Retailing.
By contrast, banking groups Mitsubishi UFJ and Mizuho were buoyant thanks to buybacks.
Drug makers Ono Pharmaceutical and Eisai rose sharply after revising up their earnings estimates for the current fiscal year to March.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average finished down 90 points at 17,780.