Tokyo stocks fell Wednesday, ending a two-day rally as a pick-up in the yen held back exporters and uncertainty hung over world oil output. The Japanese market was also weighed down by profit-taking after two days of gains, including a more than seven percent surge on Monday. "The negative mood in the market hasn't dissipated yet," said Kiyoshi Ishigane, chief strategist at Mitsubishi UFJ Kokusai Asset Management.
"So the market remains sensitive to uncertainty. It's going to take time for that to disappear." The dip came as market heavyweight SoftBank jumped 5.84 percent to 5,398 yen, adding to Tuesday's nearly 16 percent surge. The sharp rise was in response to the mobile carrier announcing it would buy back about 14 percent of its shares for more than $4 billion over the course of a year.
At the close, the benchmark Nikkei 225 dropped 1.36 percent, 218.07 points, to 15,836.36, while the Topix index of all first-section shares fell 1.13 percent, or 14.61 points, to 1,282.40. On currency markets, the dollar eased to 113.87 yen from 114.03 yen in New York. A stronger yen is bad for the profitability of Japanese exporters and tends to hit demand for their shares. Wall Street rose Tuesday thanks to gains in beaten-down technology shares, as the oil market gave a lacklustre response to a conditional agreement between Saudi Arabia and Russia to freeze output at record levels.
"The market was expecting a little more - cuts to production, for example - and it's undeniable that investors aren't fully satisfied with the pledge," Chihiro Ohta, general manager of investment information at SMBC Nikko Securities, told Bloomberg News. Oil-linked shares fell in Tokyo with energy explorer Inpex Corp tumbling 6.74 percent to 901.7 yen and Japan Petroleum Exploration dropping 5.49 percent to 2,581 yen. Toyota fell 2.78 percent to 6,076.0 yen, while rival Nissan was down 1.53 percent at 979.7 yen and banking giant Mitsubishi UFJ sank 2.36 percent to 489 yen.