The benchmark Nikkei average snapped its four-session winning streak in lackluster trading Friday, pressured by concerns over an overheating market.
The 225-issue Nikkei average fell 42.86 points, or 0.14%, to close at 29,520.07, after climbing 57.00 points Wednesday. The Tokyo market was closed Thursday for a national holiday.
On the other hand, the Topix index of all first section issues gained 3.06 points, or 0.16%, to end at 1,933.88, advancing for the fifth session following a 5.28-point gain the previous trading day.
The market opened higher, reflecting strong demand for stocks in the semiconductor sector spurred by media reports that U.S. President Joe Biden will tackle the global chip supply shortage.
After the initial buying ran its course, profit-taking pressure built up as market overheating worries grew in the wake of the Nikkei’s 12,000-point gain during the latest bull run, brokers said.
But investor expectations for global economic recovery, reinforced by recent rosy corporate earnings reports and progress made in the process of getting Biden’s $1.9 trillion stimulus package pass through U.S. Congress, underpinned the market.
Trading was slow because it was sandwiched between the national holiday and the weekend and because many other Asian markets were closed for the Lunar New Year holiday, brokers said.
“The Nikkei’s rally came to an end as investors, worried about the index’s too-fast rise, boosted selling of its heavily weighted component stocks,” said Masayuki Otani, chief market analyst at Securities Japan Inc.
Maki Sawada, strategist at Nomura Securities Co., pointed out that the market was in the midst of “buying the dip” and selling to lock in gains.
Participants continued to buy shares backed by brighter earnings prospects, a broker added.
On the TSE first section, decliners slightly outnumbered gainers 1,107 to 1,004, while 82 issues stayed flat. Volume grew moderately to 1.343 billion shares from Wednesday’s 1.324 billion shares.
Among the major Nikkei components, industrial robot-maker Fanuc went down by 2.55% and technology investor SoftBank Group by 1.65%.
Shipping stocks were battered as well, with Nippon Yusen diving 4.70% and Mitsui O.S.K. Lines 4.66%.
Other noticeable losers included automaker Honda and power utility Tepco.
On the other hand, active semiconductor buying pushed up testing device manufacturer Advantest by 3.86% and production equipment-maker Tokyo Electron by 3.67%.
Toyota jumped 3.48% after the leading automaker revised up its earnings projections for the year ending in March.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average shed 40 points to end at 29,380.
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