Japanese stocks closed lower in broad-based selling on Wednesday, with a drop in US shares and a weaker dollar against the yen prompting investors to take a breather from the market's recent rally. Japan Tobacco Inc and Mizuho Financial Group Inc led declines after rating downgrades, but some chip stocks such as Advantest Corp gained ground after tech bellwether Intel Corp posted record quarterly sales. The Nikkei average dropped 0.75 percent or 86.60 points to close at 11,453.39. The broader TOPIX index slid 0.81 percent to 1,147.89.
Market participants said that after rallying since late last year, the Nikkei was finding it difficult to break the 11,600 level.
"We're now at around 11,500 and today's drop is no more than position adjustment as we've run out of reasons to chase the market higher," said Joji Maki, senior director at Baring Asset Management.
Investors sold across the board, with 32 of the Topic's 33 subsections slipping.
Copier and printer maker Canon Inc, Japan's biggest electronics issue by market value, dropped 2.2 percent to 5,420 yen and fellow exporter Toyota Motor Corp shed 1.2 percent to 4,140.
The dollar was trading at 103.45 yen in Tokyo.
It had been around 104.20 yen on Tuesday. The Nikkei has climbed 6.5 percent since December. 10, when it hit a two-month closing low, and the recent gains in some individual stocks have prompted a rash of analyst downgrades due to valuation concerns.
Japan Tobacco fell 3.6 percent to 1.07 million yen on a downgrade from Morgan Stanley, while Mizuho slipped 2.2 percent to 499,000 after a rating cut from Merrill Lynch.
Videogame machine maker Nintendo Co dropped 1.1 percent to 12,240 yen after Daiwa Institute of Research lowered its rating.
"The market has established a new range and possibly from here till the end of January we'll be stuck between 11,200 to 11,600," said Kirby Daily, strategist at Society Generale Securities' Fiat division.
After a run-up in chip stocks on Tuesday due to high hopes for Intel's earnings, advances on Wednesday were more modest, with only select issues rising.
Advantest, the world's largest maker of chip testing devices, gained 1 percent to 8,750 yen and stepper maker Nikon Corporation. was up 0.6 percent at 1,258. Retail stocks were the only sector to find higher ground. Convenience store chains Lawson Inc.
Put on 5.6 percent, extending gains into a second session after reporting improved earnings.
Declines trounced advancers 1,074 to 411.
Trade remained active with 1.61 billion shares changing hands, though that was down slightly from Tuesday's 1.68 billion.
Comments
Comments are closed.