Japan's TOPIX index reversed its morning gains to close lower on Wednesday as profit-taking trimmed rises in Toyota Motor Corp, Mizuho Financial Group Inc and other leading firms, and steel makers slid on concerns about higher raw material costs.
Buying in stock index futures and large-lot buying of shares in top banks had helped lift the TOPIX to its highest level in nearly 15 years by midday.
"It looks like an initial target has been achieved," said Takashi Miyazaki, general manager of the investment strategy division of Mitsubishi UFJ Partners Asset Management.
The Nikkei average fell for a second session to close down 0.28 percent at 17,243.98.
The capital-weighted TOPIX index of all first-section stocks on the Tokyo Stock Exchange finished down 0.21 percent at 1,746.05. It earlier rose as high as 1,769.11, its highest point since November 1991.
It closed on Monday a tad below its dot.com closing high in early 2000 of 1,754.64 and since then has been vulnerable to selling on any gains.
Behind the recent gains lay optimism that Japanese firms would post a fifth straight year of profit expansion in the year that started on April 1 against the backdrop of a solid recovery in the world's second-biggest economy and expectations that local investors will pour more money into shares.
Also, speculative buying in the futures market fuelled strong gains in the morning, said Teruhisa Ishikawa, manager of Mizuho Investors Securities' investment information department. "Now that such buying has lost steam, the situation is back to normal," he said.
Mitsubishi UFJ Partners' Miyazaki said it would be difficult for share prices to rise further from current levels without a slew of upward earnings revisions or other bullish news.
NEC Corp fell 0.8 percent to 837 yen, snapping a five-day winning streak, despite news that it and EMC Corp, the world's biggest computer-storage device maker, have agreed to cooperate in the data storage device business.
A brokerage upgrade last week had helped send the shares of NEC to a two-year intraday high of 855 yen on Monday.
Steel makers extended their recent falls due to concerns that higher costs of raw materials, such as iron ore, would eat into profits.
Shares in Nippon Steel Corp fell 2.2 percent to 443 yen and JFE Holdings Inc lost 2.8 percent to 4,520 yen.
Canon, the world's top maker of digital cameras, climbed 3 percent to 8,300 yen, although the close was off a lifetime high of 8,450 yen hit in the morning. Another digital camera maker Pentax Corp was up 4.7 percent at 730 yen.
Toyota, the world's most profitable auto maker, was up 1.2 percent at 6,560 yen, after hitting a lifetime high of 6,630 yen.
Mizuho Financial, Japan's second-biggest banking group and the most active issue by value, also hit a lifetime high of 1.01 million yen before ending up 1.3 percent at 994,000 yen.
Trade was active, with 2.14 billion shares changing hands on the first section, above last year's daily average of 2.07 billion. Decliners beat advancers by a ratio of more than 3 to 1.
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