Tokyo stocks drop in morning on profit-taking after recent rally

Tokyo stocks fell slightly Tuesday morning, as investors locked in recent gains after the Nikkei index rallied for six consecutive days to reach highs last seen in early 1990.

The 225-issue Nikkei Stock Average dropped 109.73 points, or 0.31 percent, from Monday to 35,792.06. The broader Topix index was down 12.31 points, or 0.49 percent, at 2,512.29.

The U.S. dollar firmed to the lower 146 yen range in Tokyo as the yen was sold amid the view that the Bank of Japan will not move to normalize its ultraloose monetary policy this month, as it intends to support the economy following a recent destructive earthquake in central Japan.

At noon, the dollar fetched 146.05-06 yen compared with 145.75-85 yen in London at 4 p.m. and 145.44-45 yen in Tokyo at 5 p.m. Monday.

The euro was quoted at $1.0922-0926 and 159.52-59 yen against $1.0945-0955 and 159.60-65 yen in London and $1.0954-0955 and 159.32-36 yen in Tokyo late Monday afternoon. U.S. financial markets were closed Monday for a public holiday.

Stocks were sold as the Nikkei's 2,600-point surge over six trading days left investors concerned the market is overheated, analysts said.

"Given the speed and scale of recent rises, it was only a matter of time before the market adjusted," said Maki Sawada, a strategist in the Investment Content Department of Nomura Securities Co.

However, selling was limited by investor confidence in the equities market, as sentiment was supported by Tokyo Stock Exchange Inc.'s release Monday of a list showing around 40 percent of prime market firms disclosed plans to increase corporate value, analysts said.

© Kyodo News