• Kyodo


Tokyo stocks fell Tuesday on selling to lock in gains after the Nikkei index climbed to a one-month high the previous day, as investors grew cautious ahead of a two-day U.S. Federal Reserve policy meeting.

The 225-issue Nikkei Stock Average ended down 126.18 points, or 0.43%, from Monday at 29,520.90. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 13.05 points, or 0.64%, lower at 2,031.67.

Decliners were led by insurance, nonferrous metal and securities house issues.

The U.S$. edged down to the upper ¥113 range in Tokyo as traders sold the currency to secure recent gains before the Fed meeting, with its policy decision to be announced Wednesday, dealers said.

At 5 p.m., the dollar fetched ¥113.65-67 compared with ¥113.95-¥114.05 in New York and ¥114.42-43 in Tokyo at 5 p.m. Monday.

The euro was quoted at $1.1609-1610 and ¥131.94-98 against $1.1602-1612 and ¥132.24-34 in New York and $1.1563-1565 and ¥132.31-35 in Tokyo late Monday afternoon.

The yield on the benchmark 10-year Japanese government bond fell 0.010 percentage point from Monday's close to 0.080% as the safe-haven debt was bought on sluggish Tokyo stocks. Bond yields move inversely to prices.

The drop in stocks came a day after the Nikkei index ended at a one-month high, jumping over ¥750, or 2.6%, on the Japanese ruling coalition's victory in Sunday's general election. The firming yen further dragged down shares in the afternoon.

The market is looking for hints about a possibly earlier-than-expected interest rate hike and awaiting the Fed chief's comments on the inflation outlook, with investors having factored in a decision at the meeting on tapering the U.S. central bank's bond purchases.

"Investors are watching closely how long (the Fed) will take to complete the tapering" before raising rates, said Shingo Ide, chief equity strategist at NLI Research Institute.

"The shorter the tapering period, the more the market would be wary of a sooner-than-expected rate hike…which will then hurt stock markets," Ide added.

On the First Section, declining issues outnumbered advancers 1,585 to 538, while 60 ended unchanged.

Some technology issues saw investors lock in gains, with semiconductor maker Screen Holdings falling ¥70, or 0.6%, to ¥10,960 and electronic parts maker Murata Manufacturing sliding ¥139, or 1.6%, to ¥8,480.

Export-related issues were also weak on the yen's slight gain, as a strong yen erodes Japanese companies' overseas profits when repatriated.

Panasonic dropped ¥14.0, or 1.0%, to ¥1,368.0 and Sharp sank ¥17, or 1.3%, to ¥1,337. Honda Motor declined ¥26, or 0.7%, to ¥3,453.

Trading volume on the main section fell to 1,183.56 million shares from Monday's 1,285.90 million shares.

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