Nikkei winning streak ends at five sessions

The Nikkei 225 average snapped its five-day winning streak Wednesday, hurt by profit-taking.

The key market gauge shed 18.28 points to close at 18,585.20. The Topix lost 0.66 points to end at 1,507.62, ending its seven-day winning streak.

Stocks attracted buying after European and U.S. markets firmed Tuesday, but they came under profit-taking pressure on concerns about short-term market overheating after recent rises, brokers said. The TSE’s downside, however, was limited, they said.

The Nikkei briefly slipped into negative territory in the morning but wiped out its losses as investor appetite for buying on dips was strong, a major securities firm official said.

Earlier buying interest in Tokyo reflected the strength of Wall Street overnight, when the Dow Jones industrial average rewrote a record closing high. Brokers noted a sense of ease in the U.S. market after Federal Reserve Chairwoman Janet Yellen signaled her careful stance on an early interest rate hike in congressional testimony.

“The TSE’s dip “was a natural pause for breath for the market to turn down the heat after recent rises,” the securities firm official said.

The official predicted that the market’s upward trend will continue for the time being on the back of expectations that Japan’s economy will recover.

“Stocks were weighed down by selling to lock in profits, but their downside was solid,” said Toshikazu Horiuchi of Iwai Cosmo Securities Co.’s investment research department.

“I think investors confirmed signs of the country’s economic recovery on expectations of an increase in personal consumption,” Horiuchi added.

“But the market will face a correction as no fresh market-moving factors are unlikely to emerge in the Japan this week,” he added.

With several technical indicators suggesting the market’s overheating, profit-taking pressure is likely to accelerate unless fresh positive incentives emerge, brokers said.

While the key market gauges eased, rising issues outnumbered falling ones 888 to 825 on the first section, while 144 issues were unchanged.

Volume dwindled to 2.212 billion shares from Tuesday’s 2.320 billion.

Airlines JAL and ANA and railway operator JR Tokai were downbeat. Automaker Toyota and electronics manufacturers Hitachi and Toshiba were also on the minus side.

Among other major losers were clothing store chain operator Fast Retailing, mobile phone carrier KDDI and industrial robot maker Fanuc.

On the other hand, oil developer Inpex, oil distributor JX Holdings, mobile phone carrier SoftBank, electronics manufacturer Sony and automaker Mazda were buoyant.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average was up 10 points to end at 18,630.

Nikkei Futures

nikkeifutures.org@imediaone.com

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