Japan's Nikkei average hit a fresh seven-month closing high on Friday after a European Central Bank liquidity operation this week underpinned market sentiment, but it failed to hold above 9,800 for a third day as market players warned of a correction. While investors continued to pick up real estate companies and financials, they took profits in recent gainers like automakers.
----- Elpida tumbles 28pc in heavy trade
The benchmark Nikkei climbed 0.7 percent to 9,777.03, bringing its weekly gain to 1.3 percent. The index, however, failed to top technical resistance near 9,838, a 61.8 percent retracement of its fall from February to November last year.
The Nikkei briefly rose above that level for the past two days but failed to sustain gains as many Japanese investors were eager to lock in profits after February's rally ahead of their book-closing at the end of this month. The broader Topix gained 0.8 percent to 837.82, but similarly met resistance at 840, a 50 percent retracement of the decline in the same period.
Toyota was down 0.6 percent and Nissan Motor Co fell 1.1 percent after automakers were bought heavily this week on the softer yen, triggered by last month's surprise easing move by the Bank of Japan. Japan's transportation equipment subindex was the worst sectoral performer and fell 0.3 percent.
Japan's No. 1 brokerage Nomura Holdings jumped 2.4 percent and topped the Topix core 30 list, while real setae firms Sumitomo Real Estate gained 1.2 percent and Nomura Real Estate advanced 1.5 percent. Among heavily traded shares was Elpida Memory Inc which topped the main board as the biggest percentage loser and shed 28.6 percent.
The stock had lost more than 98 percent this week after it filed for bankruptcy protection on Monday with 448 billion yen ($5.6 billion) in debt, a record for a Japanese manufacturer. The stock traded at 3.3 times the usual average 30-day volume. Overall trading volume was thin, with 2.25 billion shares changing hands on the main board, down from 2.63 billion shares on Thursday.
The Nikkei has gained more than 15.6 percent so far this year, boosted by a run of US economic data suggesting a robust recovery in the world's largest economy and accommodative policies by global central banks that have pushed investors back into risk assets. "The rally has been so fast that market players are becoming wary of overheating. At the individual company level, it is becoming difficult to buy at the current price as well," said Ryota Sakagami, chief strategist at SMBC Nikko Securities.
The price-book value ratio of the bottom 20 percent of the market is edging near 0.5 - a level compatible with the historical average - from around 0.3 before the market's rally, he said. The benchmark was also deep in "overbought" territory, with its 14-day relative strength index at 82.2.