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Tokyo stocks fell back Wednesday as they entered what brokers see as a correction phase after a bull run since early November.

The 225-issue Nikkei average of the Tokyo Stock Exchange dropped 286.48 points, or 1.10%, to close at 25,728.14, after gaining 107.69 points Tuesday.

The Topix index of all TSE first section issues shed 14.01 points, or 0.81%, to end at 1,720.65, following a 2.85-point rise the previous day.

Stocks fell after all three major Wall Street indexes dropped Tuesday on worse-than-expected U.S. retail statistics.

Market players sought to adjust their positions after the Nikkei rose by some 3,000 points since the end of October.

Sentiment was also dampened by news that Tokyo confirmed a record 493 new coronavirus cases Wednesday.

Brokers said that the downward turn was expected, given the sense of overheating had been spreading as the Nikkei reached its highest levels since the collapse of Japan’s bubble economy in the early 1990s.

“It’s a healthy correction that will ultimately lead to a further rise,” said Kazuo Kamitani, senior associate at Nomura Securities Co.’s Investment Research & Investor Services Department.

Kamitani added that the market was especially sensitive to bad news at the moment. Comments or actions by U.S. President Donald Trump may trigger a larger slide, Kamitani said, noting that there were reports of Trump allegedly asking aides about attacking Iran’s nuclear facilities.

Masayuki Otani, chief market analyst at Securities Japan Inc., predicted that the Nikkei may fall to a range between ¥25,000 and ¥25,500 to adjust for the overheating.

“But if it does not fall as much, investors may see strength in the Tokyo market and drive the Nikkei back up before a full correction can occur,” he added.

On the TSE first section, decliners outnumbered gainers 1,445 to 646 with 85 issues unchanged. Volume decreased to 1.187 billion shares from Tuesday’s 1.373 billion shares.

Honda and other automakers struggled due to the dollar’s fall against the yen.

Stocks heavily weighted on the Nikkei index attracted selling. Fast Retailing dropped 2.56% and Tokyo Electron fell 1.91%.

Other losers include optical equipment-maker Olympus.

On the other hand, Ya-Man jumped 11.88% a day after the beauty device-maker more than doubled its full-year operating profit estimate.

Department store operator Isetan Mitsukoshi and industrial robot-maker Yaskawa Electric also rose.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average fell 340 points to end at 25,700.

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