Stocks fell back on the Tokyo Stock Exchange Tuesday amid a growing wait-and-see mood prior to closely watched events including a speech by U.S. Federal Reserve Chair Janet Yellen.
The 225-issue Nikkei average lost 30.84 points, or 0.18 percent, to finish at 17,103.53. On Monday, the key market gauge advanced 131.62 points.
The Topix index of all first-section issues closed down 4.25 points, or 0.31 percent, at 1,377.60, after rising 15.80 points the previous day.
Tokyo stocks met with selling from the outset of Tuesday’s trading after U.S. equities were mixed on Monday.
Although selling to lock in gains took the upper hand, the market gradually trimmed losses in the morning session on the back of the yen’s weakening against the dollar, briefly pushing up the Nikkei average to positive territory.
In the afternoon, however, stocks lost their upward momentum, with the key market gauge falling back in thin trading, as investors retreated to the sidelines before key U.S. economic indicators are released and Yellen delivers a speech in New York, later on Tuesday, according to brokers.
The market was also pressured by losses of stocks that went ex-dividend on Tuesday, but its downside was limited thanks to buying on dips on the back of increasing hopes for economic stimulus measures by the government, brokers said.
“Expectations for public spending grew slightly as the fiscal 2016 budget was expected to be enacted and a press conference was likely to be held” by Prime Minister Shinzo Abe later on Tuesday, said Masayuki Otani, chief market analyst at Securities Japan Inc.
“But the market was in a wait-and-see mood, with investors closely watching Yellen’s upcoming speech, following recent hawkish remarks by Fed policymakers on the possibility of an interest rate hike,” Otani explained.
An official of another securities firm said that if she provides any hint of an early rate hike, the dollar will rise further and help push up the Tokyo stock market.
Falling issues outnumbered rising ones 1,061 to 789 in the TSE’s first section, while 85 issues were unchanged.
Volume fell to about 1.75 billion shares from Monday’s about 1.85 billion shares.
Drugmakers Astellas and Takeda, airlines JAL and ANA, and railway operator JR East met with selling.
Also on the minus side were megabanks Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, condominium builder Daito Trust Construction and oil company Inpex.
Other major losers included automakers Toyota and Fuji Heavy, game maker Nintendo and industrial robot producer Fanuc.
By contrast, clothing store chain operator Fast Retailing, retailer Seven & i Holdings and mobile phone carrier SoftBank Group attracted buying.
Automaker Mazda, electronics producer Sony and Japan Tobacco were also buoyant.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average closed up 130 points at 17,100.