TOKYO: Japan’s Nikkei share average dropped sharply from a 33-year high on Tuesday as some investors swooped in to take profits following a breathless eight-day rally.
The Nikkei started the day strong, reaching a fresh peak at 31,352.53 - a level last seen in August 1990 - but pared gains after the midday break, attracting more sellers.
Declines cascaded quickly to push the benchmark down as much as 0.83% before the index closed the day down 0.42% at 30,957.77.
In a usual move that perplexed traders, Toyota Motor Corp tumbled 4.77% in the final moments of trading to be the Nikkei’s biggest decliner.
The broader Topix fell 0.66% to 2,161.49.
“The Nikkei started to look top heavy in the afternoon, which invited some profit-taking,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.
However, Ichikawa still forecasts a climb to 33,500 by year-end.
“Foreign investors are really snapping up Japanese shares at the moment, so the trend higher for the Nikkei is likely to continue.” Overseas players have been the main driver of the rally, drawn by the Tokyo Stock Exchange’s (TSE) push for better corporate governance and Warren Buffett’s increased investment in Japanese trading companies.
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