Tokyo stocks ended lower Wednesday on concerns over the negative impact of rising long-term interest rates in Japan.
The 225-issue Nikkei Stock Average ended down 298.50 points, or 0.77 percent, from Tuesday at 38,556.87. The broader Topix index finished 26.88 points, or 0.97 percent, lower at 2,741.62.
On the top-tier Prime Market, decliners were led by electric power and gas, marine transportation and land transportation issues.
The yield on the 10-year Japanese government bond at one point climbed 0.040 percentage point from Tuesday's close to 1.075 percent, its highest level in more than 12 years.
It has recently come under selling pressure amid lingering speculation that the Bank of Japan is moving ahead with reducing its massive bond purchases as it normalizes its monetary policy.
The U.S. dollar was firm in the lower 157 yen range, briefly hitting its highest level in about a month, on prospects that the interest rate differential between the United States and Japan will remain wide on the back of solid U.S. economic data, dealers said.
Stocks were initially slightly higher before falling into negative territory and extending losses toward the end of the day.
"The ongoing rise in the yield on the 10-year Japanese government bond was a key negative factor that led to a majority of issues being sold," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Investors also took in profits after the Nikkei index briefly surpassed the 39,000 threshold, he added.
The market's downside, however, was supported by high-tech issues, which rose in tandem with their U.S. counterparts after the technology-heavy U.S. Nasdaq index closed at a fresh record high overnight, analysts said.
