Stocks lost ground Friday, hit by futures-led selling.
The Nikkei 225 average dropped 185.49 points, or 0.95 percent, to end at 19,285.63. On Thursday, the key market gauge tumbled 275.08 points.
The Topix shed 16.04 points, or 1.02 percent, to close at 1,552.78 after losing 23.19 points Thursday.
After opening weaker on lower European and U.S. equities, the TSE briefly popped up into positive territory and the Nikkei temporarily gained more than 100 points.
Stocks, however, met with heavy sell-offs in the afternoon, led by selling of index futures.
Such heavy selling of index futures was triggered by foreign investors, upsetting the market, brokers said.
The afternoon sell-off sent the Nikkei average tumbling to as low as 19,099.87 at one point.
Investors were caught off guard by the sudden price decline since a view had grown that stocks would remain solid, an official at a bank-affiliated securities firm said.
The sell-off came while there was an impression that the key market gauges were strong despite possible pressure from the effects of component issues going ex-dividend, an official at another securities firm said.
With the approach of the fiscal year-end on Tuesday “it was difficult for investors to actively trade stocks,” said Toshikazu Horiuchi of Iwai Cosmo Securities Co.’s investment research department. “In such a situation, selling, which is believed to have been made by foreign investors, weighed heavily on the market.”
Kenichi Hirano, market analyst at K Asset Co., said investors were also worried about high prices after a recent rise in stocks.
As pension funds are expected to retreat to the sidelines in the beginning of the new fiscal year “it seems difficult for the Nikkei to top 20,000 for the time being,” Hirano added.
Falling issues far outnumbered rising ones 1,507 to 304 in the first section, while 38 issues were unchanged.
Volume increased to 2.568 billion shares from 2.299 billion Thursday.
Marine transportation firms, such as Nippon Yusen and Kawasaki Kisen, dropped sharply amid a growing geopolitical risk in Yemen following the launch of airstrikes by Saudi Arabia, brokers said.
Japan Airlines, trading houses Mitsui and Mitsubishi and oil distributor JX Holdings were also downbeat.
Other major losers included Toyota and Toshiba as well as electronics parts producer Murata Manufacturing and industrial robot manufacturer Fanuc.
On the other hand, Panasonic, Sony, Japan Tobacco and daily goods maker Kao were buoyant.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average finished up 30 points at 19.320.