Japanese stocks lost early gains to close lower for a second session on Tuesday as investors locked in profits before seeing whether blue-chip firms' earnings due later this week and next would meet expectations.
Caution spread ahead of quarterly earnings and forecast updates, in particular those of information technology firms, after a profit warning by NEC Soft Ltd., a subsidiary of NEC Corp., sent its shares reeling more than 10 percent.
The key Nikkei average finished the day down 0.41 percent at 10,928.03 after an early rebound from a 0.87 percent fall in the previous session halted at 11,075.30.
The broader TOPIX index lost 0.51 percent to 1,063.36.
NEC Soft, which develops software and provides systems integration services, fell 12.42 percent to 2,680 yen, pulling down its rivals and helping send the information and communications subindex ICOMS.1.84 percent lower.
"The market is now more sensitive to bad news than good news," Muneyuki Tsuji, fund manager at Japan Investment Trust Management, said, referring to NEC Soft's plunge.
Investors are looking forward to an earnings report from consumer electronics giant Sony Corp due on Wednesday.
Sony fell for a second session to close 0.69 percent lower at 4,330 yen. On Friday, Sony hit a 10-month closing high of 4,450.
Rival Matsushita Electric Industrial Co. also fell for a second day, skidding 0.92 percent to 1,615 yen.
"Sony and several of its peers are running out of steam," Tsuji said. "That's not a surprise at all, given that good earnings on the back of the boom in digital consumer goods are almost fully factored into their share prices.
Just ahead of its earnings report, shares of chip maker NEC Electronics Corp slumped 4.04 percent to 7,830 yen
NEC Electronics, an NEC affiliate which benefits from brisk global demand for digital cameras and DVD recorders, said after the market closed that its October-December net profit soared 76 percent from a year earlier to 8.36 billion yen ($78.59 million).
Chip-testing device maker Advantest Corp., another beneficiary of chip demand for digital goods, posted a profit for the latest quarter and raised its full-year outlook. Ahead of its earnings report, Advantest ended up 0.11 percent at 9,220 yen.
NIKKEI'S BARRIER
Analysts said investors' tendency to "buy on the rumor, sell on the fact" looks to dominate the market for now, likely preventing the Nikkei from rising beyond a three-month closing high of 11,103.10 marked last week.
"The 11,000 barrier looks too hard to break through given that help from (buying by) foreigners is apparently withering," said Yusuke Sakai, manager of equities at Mizuho Securities.
"There are banks and other domestic players who want to sell above that level."
Bargain-hunting was limited in the banking sector, which took a beating on Monday after a report that Japan's financial watchdog would get tougher on loan records at UFJ Bank cast doubt on recent optimism for a resolution to bad-loan problems.
On Friday, the Financial Services Agency (FSA) said it would conduct another round of special inspections at major banks that will focus on their big, troubled borrowers.
It will be the third check of its kind by the FSA aimed at sorting out the bad-loan mess at Japan's major banks that has hobbled the economy for a decade.
Previous checks by the FSA found a need for banks to set aside extra loan-loss charges as a result of a downgrading in some loan classifications.
UFJ Holdings Inc, UFJ Bank's parent and Japan's fourth-largest banking group, was up a meager 0.21 percent at 471,000 yen. The stock's recovery from an 11.65 percent tumble in the previous session stopped at 485,000 yen.
Volume slowed, with 1.061 billion shares changing hands on the first section, the lowest daily total this year to date, excluding half-day trade on January 5.
Decliners outnumbered gainers 956 to 451.
($1=106.37 Yen) Previous 1| 2
Caution spread ahead of quarterly earnings and forecast updates, in particular those of information technology firms, after a profit warning by NEC Soft Ltd., a subsidiary of NEC Corp., sent its shares reeling more than 10 percent.
The key Nikkei average finished the day down 0.41 percent at 10,928.03 after an early rebound from a 0.87 percent fall in the previous session halted at 11,075.30.
The broader TOPIX index lost 0.51 percent to 1,063.36.
NEC Soft, which develops software and provides systems integration services, fell 12.42 percent to 2,680 yen, pulling down its rivals and helping send the information and communications subindex ICOMS.1.84 percent lower.
"The market is now more sensitive to bad news than good news," Muneyuki Tsuji, fund manager at Japan Investment Trust Management, said, referring to NEC Soft's plunge.
Investors are looking forward to an earnings report from consumer electronics giant Sony Corp due on Wednesday.
Sony fell for a second session to close 0.69 percent lower at 4,330 yen. On Friday, Sony hit a 10-month closing high of 4,450.
Rival Matsushita Electric Industrial Co. also fell for a second day, skidding 0.92 percent to 1,615 yen.
"Sony and several of its peers are running out of steam," Tsuji said. "That's not a surprise at all, given that good earnings on the back of the boom in digital consumer goods are almost fully factored into their share prices.
Just ahead of its earnings report, shares of chip maker NEC Electronics Corp slumped 4.04 percent to 7,830 yen
NEC Electronics, an NEC affiliate which benefits from brisk global demand for digital cameras and DVD recorders, said after the market closed that its October-December net profit soared 76 percent from a year earlier to 8.36 billion yen ($78.59 million).
Chip-testing device maker Advantest Corp., another beneficiary of chip demand for digital goods, posted a profit for the latest quarter and raised its full-year outlook. Ahead of its earnings report, Advantest ended up 0.11 percent at 9,220 yen.
NIKKEI'S BARRIER
Analysts said investors' tendency to "buy on the rumor, sell on the fact" looks to dominate the market for now, likely preventing the Nikkei from rising beyond a three-month closing high of 11,103.10 marked last week.
"The 11,000 barrier looks too hard to break through given that help from (buying by) foreigners is apparently withering," said Yusuke Sakai, manager of equities at Mizuho Securities.
"There are banks and other domestic players who want to sell above that level."
Bargain-hunting was limited in the banking sector, which took a beating on Monday after a report that Japan's financial watchdog would get tougher on loan records at UFJ Bank cast doubt on recent optimism for a resolution to bad-loan problems.
On Friday, the Financial Services Agency (FSA) said it would conduct another round of special inspections at major banks that will focus on their big, troubled borrowers.
It will be the third check of its kind by the FSA aimed at sorting out the bad-loan mess at Japan's major banks that has hobbled the economy for a decade.
Previous checks by the FSA found a need for banks to set aside extra loan-loss charges as a result of a downgrading in some loan classifications.
UFJ Holdings Inc, UFJ Bank's parent and Japan's fourth-largest banking group, was up a meager 0.21 percent at 471,000 yen. The stock's recovery from an 11.65 percent tumble in the previous session stopped at 485,000 yen.
Volume slowed, with 1.061 billion shares changing hands on the first section, the lowest daily total this year to date, excluding half-day trade on January 5.
Decliners outnumbered gainers 956 to 451.
($1=106.37 Yen) Previous 1| 2
3287.99
1275.09
