Tokyo stocks fell Wednesday as investors locked in gains to snap a three-day win streak that saw the Nikkei index climb over 1,800 points, while firm chip-related shares limited the downside.
The 225-issue Nikkei Stock Average ended down 260.65 points, or 0.69 percent, from Tuesday at 37,703.32. The broader Topix index finished 27.44 points, or 1.05 percent, lower at 2,584.59.
On the top-tier Prime Market, decliners were led by pulp and paper, iron and steel and real estate issues.
The U.S. dollar remained strong, mostly in the mid-150 yen range in Tokyo after hitting a three-month high of 150.88 yen overnight, as higher-than-expected U.S. consumer price data lowered market expectations of an early interest rate cut by the Federal Reserve.
Stocks fell the day after the Nikkei soared above 38,000 during trading for the first time in 34 years, close to the benchmark index's all-time high of 38,915.87 reached in December 1989.
Major automakers Toyota Motor and Subaru were among issues sold after recent sharp gains, while the market was also pressured by overnight falls on Wall Street as the U.S. inflation data fueled prospects of borrowing costs staying higher for longer, analysts said.
Among the biggest decliners was technology investor SoftBank Group, after its British chip designer subsidiary Arm Holdings Plc. suffered a sell-off in the U.S. market following huge gains in recent trading.
But the Tokyo market's overall losses were limited by buying of heavyweight chip-related firms Advantest and Screen Holdings amid hopes for growth in the generative AI sector, analysts said.
"The Tokyo market was unexpectedly resilient given falls in Wall Street last night," said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.
