TOKYO: Japan’s Nikkei share average retreated from a record intraday high on Monday, as investors took profits following a multi-day rally. The Nikkei secured a record high of 41,112.24 in a choppy trading session, but closed 0.32% lower at 40,780.70. The broader Topix slipped 0.57% to 2867.61.

Sentiment was initially boosted by a strong performance in Wall Street’s main indexes on Friday after softer-than-expected US labour data fuelled expectations of interest rate cuts as early as September. The tech-heavy Nasdaq and benchmark S&P 500 hit record highs. A portion of Japan’s tech shares tracked their US peers’ gains to support the Nikkei.

However, there was a sense that shares were somewhat overbought, said Maki Sawada, an equity strategist at Nomura Securities. Investors sought to lock in profits after Japan’s main stock indexes rode five consecutive days of gains to hit record intraday peaks last week. Yen appreciation could also weigh on the market if market participants interpret testimony from Federal Reserve Chair Powell as dovish or US inflation data shows more cooling later this week, said Charu Chanana, global market strategist and head of FX strategy at Saxo.

“The scope of outperformance for Japanese equities could continue to wane as the yen recovers from its record lows.”