Tokyo stocks turned lower Tuesday, hit by selling to lock in profits following a three-session rally.
The 225-issue Nikkei average of the Tokyo Stock Exchange lost 99.75 points, or 0.44 percent, to end at 22,614.69, in a sharp downturn from a rise of 407.96 points on Monday.
The Topix index of all first section issues closed down 5.44 points, or 0.34 percent, at 1,571.71, after soaring 24.82 points the previous day.
Stocks got off to a weaker start despite the U.S. market’s continued advance Monday, in which the tech-heavy Nasdaq composite index rewrote its closing high for the third consecutive market day. Profit-taking gained strength after the Nikkei shot up more than 590 points in the past three sessions, brokers said.
The Tokyo market turned buoyant briefly in the early morning. But the rebound proved short-lived due to a lack of fresh buying incentives.
Both the Nikkei and Topix indexes stayed in negative terrain for the rest of the day’s session, with sentiment chilled by the yen’s strengthening against the dollar and a fall in U.S. index futures in off-hours trading, brokers said.
But the market resisted going further south as it was underpinned by early economic recovery hopes generated by the better-than-expected U.S. nonmanufacturing index for June, released by the Institute for Supply Management on Monday, they added.
“Although the Shanghai market extended gains, there were no other factors to send the Nikkei higher,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Investors became reluctant to buy actively ahead of record days Wednesday and Friday for dividend payments to holders of exchange-traded funds linked to the Nikkei and TOPIX, because moves to cash in stocks to finance the payments are expected to gather steam on the two days, some market players pointed out.
On the TSE’s first section, falling issues outnumbered rising ones 1,281 to 805 while 84 issues were unchanged. Volume grew to 1.093 billion shares from Monday’s 1.025 billion shares.
Automaker Toyota Motor Corp., technology giant Sony Corp. and other export-oriented issues suffered from the yen’s strengthening amid rekindled concerns over the coronavirus pandemic.
Department store operator Takashimaya Co. tumbled after announcing a consolidated net loss for March through May.
Among other losers were clothing store chain Fast Retailing Co. and drugmaker Chugai Pharmaceutical Co.
By contrast, chipmaking gear manufacturer Tokyo Electron, test device-maker Advantest Corp. and other issues in the semiconductor sector rose as did their U.S. peers on Monday.
Technology investor SoftBank Group Corp. extended its winning streak to a sixth session.
Also in the green were industrial robot producer Yaskawa Electric Corp. and cosmetics maker Shiseido Co.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average fell 110 points to end at 22,540.