The Nikkei stock index closed at an all-time high Tuesday for the third consecutive trading day, eking out gains amid persistent optimism for the U.S. economy and Japanese stocks.
The 225-issue Nikkei Stock Average ended up 5.81 points, or 0.01 percent, from Monday at 39,239.52. The broader Topix index finished 4.84 points, or 0.18 percent, higher at 2,678.46, its highest level since February 1990.
On the top-tier Prime Market, gainers were led by iron and steel, bank and machinery shares.
The U.S. dollar fell slightly to the mid-150 yen range after Japan's core inflation slowed to 2.0 percent in January from a year earlier. But it was still higher than market expectations, fueling speculation that the Bank of Japan could soon end its negative interest rate policy.
Stocks started the day higher but upward momentum faltered as investors moved to lock in gains after the Nikkei index approached the 39,500 mark, with some heavyweight semiconductor stocks sold following the surge last week.
Still, buying of cyclical stocks sensitive to economic fluctuations on continued optimism for the U.S. economy helped lift the benchmark index, analysts said.
"Although U.S. stocks fell slightly yesterday, the economy remains firm with expectations for a soft landing still strong," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
The market was also supported by hopes of a further rise in Japanese stocks, but gains were capped as investors refrained from making big moves ahead of U.S. consumer confidence data to be released later in the day, said Ichikawa.
