Tokyo stocks ended mixed Tuesday, as selling ahead of key central bank meetings in the United States and Japan this week erased earlier gains driven by strength in heavyweight semiconductor-related shares.
The 225-issue Nikkei Stock Average ended up 96.63 points, or 0.25 percent, from Monday at 39,134.79. The broader Topix index finished 5.69 points, or 0.20 percent, lower at 2,776.80.
On the top-tier Prime Market, gainers were led by machinery, precision instrument and nonferrous metal shares. The main decliners were marine transportation, securities house and air transportation shares.
The U.S. dollar was firm in the lower 157 yen range in Tokyo as traders bought the currency on prospects that the interest rate differential between Japan and the United States will remain wide after an overnight rise in long-term Treasury yields.
Stocks initially tracked overnight gains on Wall Street, boosted by heavyweight semiconductor shares and energy-related issues after U.S. crude oil futures rose Monday on expectations of solid global oil demand this summer, analysts said.
But buying lost steam in the afternoon as investors grew cautious about chasing the upside aggressively ahead of the central bank policy meetings, analysts said.
While no surprises are expected for the U.S. Federal Reserve's two-day meeting through Wednesday, there are still "many uncertainties" with the Bank of Japan's meeting later in the week, said Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Intelligence Laboratory Co.
"It is quite likely the BOJ could further reduce its purchases of government bonds, with the extent of the reduction unpredictable," said Sengoku.
Speculation that the BOJ could further reduce its bond purchases after announcing on May 13 that it would slow buying in a regular operation has recently prompted selling of the debt, sending the yield on the benchmark 10-year government bond to over a 12-year high.
