Stocks snapped their three-session winning streak on the Tokyo Stock Exchange Tuesday, pressured by profit-taking and some selling in disappointment after the Bank of Japan decided against additional monetary easing measures.
The 225-issue Nikkei average lost 116.68 points, or 0.68 percent, to end at 17,117.07. On Monday, the key market gauge climbed 294.88 points.
The Topix index of all first-section issues fell 7.87 points, or 0.57 percent, to 1,372.08, after rising 20.63 points the previous day.
The Nikkei average showed small ups and downs around the previous day’s closing level throughout the morning session as investors retreated to the sidelines to wait for the results of the BOJ’s two-day policy-setting meeting, brokers said.
In the early afternoon, the BOJ announced a decision to keep its monetary policy unchanged, as was widely expected. After the announcement, the Nikkei lost ground, dragged down by selling to lock in profits after the recent gains and some selling from investors who had hoped for additional easing steps by the central bank, brokers said.
Investor sentiment was also hurt by the first downgrade of the BOJ’s basic economic assessment in 23 months, brokers said.
The Nikkei average briefly sank some 190 points in the afternoon due to a surge of profit-taking after the key market yardstick jumped nearly 600 points in the three sessions through Monday, brokers said.
“There was some speculative selling after the BOJ meeting amid the yen’s rise against the dollar,” said Masashi Oguchi of Mito Securities Co.’s Investment Information Department.
“But such selling did not continue for a long time as investors needed to watch” a monetary policy decision by the U.S. Federal Reserve at its Federal Open Market Committee meeting for two days from Tuesday, he said.
Until the FOMC meeting ends, “the Nikkei is expected to consolidate its downside at 17,000,” said Masayuki Otani, chief market analyst at Securities Japan Inc.
Falling issues outnumbered rising ones 947 to 843 in the TSE’s first section, while 152 issues were unchanged.
Volume increased slightly to about 2.09 billion shares from Monday’s about 2.02 billion shares.
Realtors Mitsui Fudosan, Sumitomo Realty and Mitsubishi Estate came under apparent profit-taking after having advanced sharply on hopes for additional BOJ easing.
The firmer yen triggered selling of automakers Toyota, Nissan and Honda, as well as electronics giant Sony and machinery marker Hitachi.
By contrast, mobile carriers SoftBank Group and KDDI attracted buybacks.
Other domestic demand-oriented names were also upbeat. Among them were retailer Seven & I Holdings, daily goods maker Kao, drug maker Astellas and railway operator JR Tokai.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average slumped 150 points to close at 16,960.