TOKYO: Japanese shares ended lower for the third straight session on Tuesday, as a month-long rally ran out of gas, with investors awaiting US lawmakers' decision on a fresh Covid-19 pandemic relief package. The Nikkei share average lost 0.30% to close at 26,467.08. The broader Topix shed 0.11% to 1,758.81, after touching its lowest since Nov. 20 earlier in the session.

Overall sentiment remained upbeat as investors expect the global economic recovery to continue, with Covid-19 vaccines look set to be rolled out soon and stimulate consumption worldwide.

"The global manufacturing cycle is about to enter an expansion phase from contraction. For value shares, including a lot of Japanese shares, that is the phase when they historically performed the best," said Shusuke Yamada, chief Japan FX and equity strategist at Bank of America. Hydrogen product maker Iwatani jumped 10.3% after the Nikkei business daily reported that Japan was likely to set a target to expand the use of hydrogen to 10 million tonne by 2030 to meet its emission goal.

Sekisui House rose 4.3% after the housing maker's earnings beat estimates. Many tech-related shares gained, with Keyence rising 2.1%, while Nintendo and Murata Manufacturing rising 1.1% and 0.5%, respectively. Drugmakers underperformed, with Daiichi Sankyo and Astellas Pharma losing 3.2% and 2.0%, respectively.

The index of Mothers start-up market managed to bounce back to end 1.4% higher, after briefly falling below its 100-day moving average for the first time since late April.