Stocks closed lower on the Tokyo Stock Exchange on Tuesday after cutting earlier gains, pressured by the yen’s ascent.
The Nikkei average lost 59.00 points, or 0.37 percent, to end at 16,052.05. On Monday, it climbed 143.88 points.
The Topix index finished down 8.83 points, or 0.68 percent, at 1,291.17, after rising 8.18 points the previous day.
Tokyo stocks attracted buying at the outset of Tuesday’s trading after U.S. equities rebounded on Monday thanks to a sharp rally in crude oil futures prices.
But the indexes cut gains and slipped into negative territory later in the morning as the yen rose.
Investor sentiment was rapidly dampened after China set the yuan’s reference rate against the dollar at a level weaker than the previous day, brokers said.
After falling more than 100 points in the early afternoon, the Nikkei average showed minor fluctuations around the precious day’s closing level.
“An optimistic outlook over oil prices (by the International Energy Agency) supported the market, but the yen’s ascent prompted profit-taking,” said Hiroaki Hiwada, strategist at Toyo Securities Co.
The yen’s appreciation partly reflected growing concerns over Britain’s possible breakup with the European Union, brokers said.
An official of a bank-affiliated securities firm said that the new negative factor coming out from Europe weighed down the market despite retreating worries about an oil oversupply.
Falling issues far outnumbered rising ones 1,415 to 442 in the TSE’s first section, while 84 issues were unchanged.
Volume increased to 2,322 million shares from Monday’s 2,037 million shares.
Realtors, including Mitsui Fudosan and Mitsubishi Estate, suffered sharp drops.
Mobile phone carrier KDDI and air conditioner producer Daikin, both heavily weighted components of the Nikkei average, were also downbeat.
The higher yen battered export-oriented names, such as tire maker Bridgestone, electronics manufacturer Sony and electronic parts producer Murata Manufacturing.
Takata plunged 4.34 percent after a news report that U.S. authorities are looking into the inflators of the auto parts maker’s defective air bags to see whether an additional recall is needed or not.
Other major losers included Nippon Telegraph and Telephone, retailer Seven & i Holdings and fishery product maker Nippon Suisan.
On the other hand, oil company Inpex, as well as trading houses Mitsubishi and Mitsui, attracted buybacks after energy-related stocks gained ground in Europe and U.S. markets.
Steelmakers JFE Holdings and Nippon Steel & Sumitomo Metal and nonferrous metal producer Sumitomo Metal Mining were also buoyant.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average finished up 30 points at 16,100.