Japan's Nikkei edged briefly to a seven-week intraday high on Tuesday before falling into negative territory in the face of profit-taking, with the dollar's struggles against the yen weighing on sentiment. Mid-sized drugmaker Kyorin soared on a report that generics drug maker Sawai Pharmaceutical Co wants to acquire it while Canon climbed after a report that strong demand has prompted it to plan a new overseas inkjet printer plant.
While market players said losses would be limited by strong gains in US stocks and the yen's retreat from 15-year highs against the dollar after Japan intervened last week to weaken the Japanese currency, the market was vulnerable to profit-taking.
The Nikkei hit a seven-week intraday high of 9,704.25 but ended down 0.3 percent or 23.98 points at 9,602.11. The broader Topix also lost 0.3 percent, to 849.94. The Nikkei briefly edged above resistance near 9,660, which is right around the top of the cloud on daily Ichimoku charts. A clear break of that level would be a bullish sign.
But otherwise, chart signals were mixed. The Nikkei's relative strength index (RSI) stood at 61, with anything from 70 and above oversold, while its slow stochastic dipped. Kyorin surged 13.3 percent to 1,368 yen, while Sawai lost 2.7 percent to 7,480 yen. The Nikkei business daily said on Saturday that Sawai Pharmaceutical had sent an acquisition proposal to Kyorin and bought almost 5 percent of it. A number of exporters shifted into negative territory in afternoon trade, with Honda Motor Co down 0.5 percent at 3,000 yen and Sony Corp down 1.5 percent at 2,637 yen. Trade was thin, with 1.5 billion shares changing hands on the Tokyo exchange's first section. Declining shares outnumbered advancing ones, 893 to 596.
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