Japanese stocks ended lower on Tuesday as Tokyo Electron and other high-tech shares dropped on concern that security problems would hurt leading economies, but retail and property stocks gained on Japanese recovery hopes.
Traders also said some investors held back ahead of a meeting of the US Federal Open Markets Committee (FOMC) scheduled for later on Tuesday.
Akio Yoshino, general manager at SG Yamaichi Asset Management, said high-tech stocks as well as exporters had become less attractive as last week's Madrid bombings raised concerns about global economies. Furthermore, demand for semiconductors and chip equipment's appeared to have peaked, he said.
"It will get tough for shares of Japanese electronics and precision makers," he added.
The Nikkei average slipped 0.67 percent to 11,242.29, while the broader TOPIX index slipped 0.35 percent to 1,120.96.
Tokyo Electron, a maker of chip making equipment, shed 2.53 percent to 6,540 yen, while its peer Advantest Corp fell 1.33 percent to 8,180 yen.
Other large-cap technology shares sagged, with Sony Corp down 1.39 percent at 4,270 yen and office equipment giant Canon Inc sliding 1.52 percent to 5,200 yen despite forecasting record first-quarter profits.
Another notable loser was Furukawa Electric Co after the struggling Japanese telecoms equipment maker said it would post a much bigger full-year loss than it had previously forecast and would not pay a dividend.
The stock plunged 9.25 percent to 373 yen, making it the worst performer on the main board of the Tokyo Stock Exchange.
However, retail shares reeled in buyers after industry data on Monday showed department store sales in the Tokyo area rose in February, the first increase in over two years.
Leading department store operators Isetan Co was up 1.78 percent at 1,488 yen and Matsuzakaya rose 3.33 percent to 528 yen.
Struggling retailer Daiei Inc leapt 9.48 percent to 381 yen after it said on Monday its same-store sales increased by three percent in February from the same month last year.
Real estate and construction shares were also sought after more signs of pick-up in housing demand. Mitsui Fudosan, Japan's largest developer, rose 1.2 percent to 1,270 yen.
Haseko Corp, a leading condominium developer, jumped 8.28 percent to 314 yen after daily Nihon Keizai reported that a private research firm found that demand for condominiums in metropolitan areas rose in February. Yoshihiko Kosuga, equities deputy general manager at Mizuho Investors Securities, said builders and brokerage firms used to be at the bottom of their buying list but that had changed.
Decliners outnumbered gainers 810 to 629. Trading edged higher, with 1.667 billion shares changing hands versus 1.619 billion on Monday. Daily volume has exceeded 1.5 billion shares every single session this month.
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