The Nikkei 225 average turned lower Friday amid growing downward pressure from a rebound in the yen.
The key TSE gauge lost 66.36 points to close at 17,913.36. On Thursday, the Nikkei surged 327.04 points.
The Topix fell 0.01 point to 1,449.38 after rising 21.67 points Thursday. It finished lower for the first time in five market days.
The Nikkei opened lower as profit-taking gathered momentum following the previous day’s surge and the yen’s rebound past 119 against the dollar.
The decline came even though Wall Street performed well overnight partly on the back of receding worries about the Ukraine crisis due to a cease-fire agreement reached at a summit among Ukraine, Russia, Germany and France in the Belarus capital of Minsk.
Tokyo stocks also came under selling for position adjustments ahead of the weekend and because the U.S. market will be closed Monday for Washington’s Birthday.
But the market’s downside was solid, with investors welcoming the Ukrainian cease-fire, brokers said.
An official at an online securities firm noted that a wait-and-see mood grew before the release of preliminary Japanese gross domestic product data for October-December on Monday, after the seasonally adjusted GDP in July-September dropped a real 1.9 percent quarter on quarter on an annualized basis.
Still, Tokyo stocks were propped up by receding concerns about the European situation, brokers said.
In addition to the Ukrainian cease-fire, market players were heartened by the news that the European Central Bank approved an increase of €5 billion in emergency liquidity assistance to banks in debt-ridden Greece, they said.
Nobuyuki Fujimoto, market analyst at SBI Securities Co., said that “foreign and institutional investors are starting to find it easier to buy Tokyo stocks” as the Japanese corporate earnings reporting season is now in the final stage.
An official at a major brokerage said the Nikkei is expected to remain firm in the near term while market players are keeping close tabs on economic data releases and other major events both in and outside Japan as well as currency market developments.
Falling issues outnumbered rising ones 911 to 812 on the first section, while 139 issues were unchanged.
Volume fell to 2.562 billion shares from Thursday’s 2.773 billion.
The stronger yen battered export-oriented companies, such as automakers Toyota, Fuji Heavy and Mazda, auto parts maker Denso and electronic parts producer Murata Manufacturing.
Robot maker Fanuc and electronics manufacturer Hitachi were also downbeat.
Other major losers included mobile phone carrier SoftBank and clothing store chain operator Fast Retailing, both heavily weighted Nikkei components.
By contrast, telecommunications carrier KDDI and online shopping mall operator Rakuten gained ground. Oil developer Inpex and realtor Mitsubishi Estate were buoyant.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average was up 90 points at 17,960.