Tokyo stocks closed 0.59 percent lower on Wednesday, hit by a stronger yen and following a drop on Wall Street. The Nikkei 225 index at the Tokyo Stock Exchange eased 111.56 points to end at 18,703.60, while the Topix index of all first-section issues dropped 0.64 percent, or 9.82 points, to 1,517.01. "We're seeing a short-term correction," Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, told Bloomberg News.
"The market had good gains over the last month and is looking very stretched on some technical measures. Investors see the Nikkei 225 at a 15-year high and think we've got to take profits." The Nikkei last week hit its highest close since 2000, prompting a round of profit-taking, but the market has been winning support from Japan's massive public pension fund - the world's biggest - shifting more of its bond-heavy portfolio into stocks.
Investors are keeping a watch on the start of China's annual parliament meeting Thursday as well as European Central Bank details on its new bond-purchase scheme. On forex markets, the dollar eased to 119.63 yen from 119.74 yen in New York. A stronger yen is bad for shares of Japanese exporters because it shrinks the value of their repatriated overseas profits. Toyota fell 0.29 percent to 8,112.0, while Sony dropped 0.59 percent to 3,325.0 yen. Sharp tumbled 5.30 percent to 232.0 yen after the previous day's 3.54 percent drop, following media reports that it is seeking aid from its key lenders and may close some money-losing units. The news prompted Standard & Poor's to cut Sharp's already junk credit rating by three more notches, and warned of another possible downgrade.
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