Tokyo stocks snapped a three-day winning streak Thursday as investors cashed in on recent gains and early buying sentiment following fresh records on Wall Street fizzled out. "Shares were barely in positive territory earlier but profit-taking emerged in late trading," said Hikaru Sato, senior technical analyst at the investment strategy section of Daiwa Securities.
"The market needs extra energy to boost the Nikkei above the 20,000-point mark," Sato told AFP. The benchmark Nikkei 225 index fell 0.29 percent, or 58.38 points, to 19,807.44 while the broader Topix index lost 0.32 percent, or 5.20 points, to 1,632.13. "The Nikkei average turned up this week on easing of three concerns - worries over the North Korean threat, a deterioration of the US economy due to hurricane damage, and a further strengthening of the yen," said Masayuki Kubota, chief strategist at Rakuten Securities Economic Research Institute.
"But it lacks further trading pegs to chase higher prices," he said in a client note. Wall Street hit fresh records Wednesday, boosted by petroleum-linked equities and hopes Donald Trump's tax reform could see the light of day after House Republicans set a September 25 target to release an outline plan.
Investors were also cheered by the recent weaker yen, which has tumbled from last week's highs against the dollar as concerns over North Korea's sixth nuclear test abate. "But the yen decline has taken a pause, which also led to today's profit-taking," Daiwa's Sato said. A strong yen can hit the profitability of Japanese exporters and tends to drive their stock prices down.
The dollar firmed to 110.50 yen on Thursday against 110.47 yen in New York and well up from the levels around 107.30 yen touched last week. In stocks trading, Sony dropped 3.44 percent to 4,230 yen while Nintendo lost 0.26 percent to 37,670 yen. But energy companies rose, tracking rises in their US peers on expectations for higher demand for crude.
Oil explorer Inpex gained 0.84 percent to 1,078.5 yen while Japan Petroleum climbed 0.99 percent to 2,131 yen. Toshiba fell 4.53 percent to 316 yen after announcing it had picked a consortium led by US investor Bain Capital as the leading candidate to buy its prized chip business.
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