The 225-issue Nikkei average turned lower on the Tokyo Stock Exchange on Wednesday, hit by profit-taking after the surge from the outset of this year.
The average fell 61.79 points, or 0.26 percent, to end at 23,788.20. On Tuesday, the key market gauge rose 135.46 points to mark its highest closing level since Nov. 15, 1991.
By contrast, the Topix index of all first-section issues ended up 2.82 points, or 0.15 percent, at 1,892.11, its best finish since June 18, 1991. It rose 8.95 points the previous day.
After fluctuating narrowly around Tuesday’s closing level, the Nikkei average sank deep into negative territory in the morning with selling to cash in gains taking the upper hand in line with the yen’s strengthening against the dollar, brokers said. The Nikkei jumped over 1,000 points in the past three sessions from Thursday, the first trading day of 2018.
But the key market gauge trimmed much of the early losses later thanks to purchases on dips, brokers said.
The Topix index managed to mostly stay in positive territory in the morning and gathered steam in the afternoon amid the brisk performances of financial issues, according to market sources.
Investors moved to lock in profits while seeing “few trading incentives,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.
Ota also said the Nikkei’s retreat reflected investor worries about precariously high stock prices. The index has risen too fast, he pointed out.
But the market’s downside was supported by “nonresidents’ purchases,” said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co.
Foreign traders’ active buying indicated they expected no negative impact on Japanese firms’ earnings due to the yen’s appreciation Wednesday, he added.
Laggards, particularly autos, were hunted by foreign investors, brokers said.
Falling issues outnumbered rising ones 1,007 to 969 in the TSE’s first section, while 87 issues were unchanged.
Volume dropped to 1.59 billion shares, from Tuesday’s 1.66 billion shares.
Megabanks Mitsubishi UFJ, Sumitomo Mitsui and Mizuho as well as insurers Dai-ichi Life and Tokio Marine attracted purchases after their U.S. peers fared well in New York on Tuesday.
Oil companies Inpex, Cosmo Energy Holdings and JXTG Holdings were also buoyant on higher crude oil prices.
Automakers Toyota and Honda jumped 2.19 percent and 2.29 percent, respectively.
By contrast, semiconductor-related Tokyo Electron and Sumco were hit hard by profit-taking following their upsurges, brokers said.