Tokyo stocks snapped their two-day winning streak Wednesday, succumbing to profit-taking pressure ahead of Japan’s long weekend.
The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange fell 132.61 points, or 0.58 percent, to end at 22,751.61, after jumping 166.74 points Tuesday.
The Topix index of all TSE first-section issues closed down 9.78 points, or 0.62 percent, at 1,572.96, following a 5.71-point gain the previous day.
Investors stepped up selling of, among others, technology stocks to lock in profits from the outset after their vigorous advance until Tuesday, brokers said.
In the afternoon, selling spread to issues that were buoyant in the morning amid a dearth of fresh buying incentives, they noted.
As well as profit-taking, “position-squaring activities gained ground before the four-day weekend,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co. The Tokyo market will be closed on Thursday and Friday for national holidays.
“Many players were wary of a possible fall in the U.S. market during the break here,” he added.
Although sentiment was brightened by a €750-billion coronavirus recovery fund deal struck by European leaders Tuesday, the news was no longer fresh when the Tokyo market opened, an official at a major securities firm said.
On the TSE’s first section, falling issues far outnumbered rising ones 1,634 to 473 while 65 issues were unchanged. Volume shrank to 1,085 million shares from Tuesday’s 1,151 million shares.
Tech stocks that fell prey to profit-taking included chipmaking gear manufacturer Tokyo Electron.
JR Tokai and JR East met with hefty selling along with other railways, as concerns over a passenger traffic plunge during the four-day weekend grew after Tokyo Gov. Yuriko Koike asked the capital’s residents to refrain from making nonessential trips.
Daily goods maker Kao and cosmetics giant Shiseido were also among noticeable losers.
On the other hand, Nidec surged 4.77 percent, thanks to the electric device maker’s better-than-expected operating profit for April-June.
NH Foods and retail group Seven & i Holdings also went up.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average lost 90 points to end at 22,750.