Japan's Nikkei average ended down on Wednesday, slipping below the 11,000 level for the first time in five sessions as investors, wary of recent overheating, sold banks like Mizuho and other domestic-oriented stocks.
Investors had bought non-exporters on optimism about Japan's economic recovery but unloaded brokers such as Nomura Holdings Inc and Nikko Cordial Corp
"The speed at which the market has risen has been too rapid. So it's natural for the market to enter a correction phase," said Koichiro Suzuki, a manager at investment department of Sompo Japan Asset Management.
"I think the market will fall a bit further," added Suzuki, who expects the Nikkei to hold at least above the 10,000 yen level.
The Nikkei closed down 1.29 percent at 10,889.62, adding to a 1.17 percent fall on Tuesday. The broad-based TOPIX index fell 1.79 percent to 1,073.75.
The Nikkei reached a 16-month intraday high of 11,238.63 on Tuesday morning, but pulled back as investors worried about its rapid nine percent rise since the start of October.
The TOPIX was also dragged down mainly by selling in banks such as Mizuho Financial Group Inc, the world's largest bank by assets, which fell 7.33 percent at 278,000 yen, and UFJ Holdings Inc, which also fell 7.56 percent to 489,000 yen.
Selling in brokers also weighed on the market, with top brokerage Nomura Holdings down 3.92 percent to 1,913 yen, adding to a 3.82 percent fall on Tuesday. Third-ranked Nikko Cordial eased 4.18 percent to 687 yen, down for the second straight day after seven sessions of rises.
Technology shares also could not escape the bearish sentiment, with NEC Corp losing 2.41 percent to 931 yen after reaching a 2003 high of 988 on Tuesday.
Fujitsu Ltd and Sharp Corp also both came off from 2003 year highs hit on Tuesday, Fujitsu slipping 3.5 percent to 690 yen and Sharp sagging 0.88 percent to 1,804 yen.
Trading volume slowed, with 1.29 billion shares changing hands on the first section, the lowest total since October 9. Decliners outnumbered gainers 1,134 to 288.
EYEING ON FOREIGN INVESTORS
Suzuki of Sompo Japan Asset Management said the key to seeing where the market will head next would be foreign investors, who have a significant presence in the Japanese stock market.
For the April-September period, foreign investors accounted for some 50 percent of turnover and bought a net six trillion yen ($54.77 billion) worth of shares, poised to break the record for a full financial year of 7.5 trillion yen set in 1999/2000.
"The volume they handle is much bigger than Japanese investors," Suzuki said. "In order to gauge foreign investors' sentiment, you have to watch how the U.S. market performs."
For now however, earnings results dictate investment decisions for some shares.
Yamaha Corp was up 2.68 percent at 2,300 yen after the world's largest musical instruments maker raised its parent-only net profit forecast for the half year to September by 37.1 percent to 19.2 billion yen.
Trend Micro Inc jumped 5.03 percent to 3,340 yen after the anti-virus software maker on Tuesday posted a 31.3 percent year-on-year rise in group net profit for July-September to 2.34 billion yen.
Meanwhile, investors agreed that some dealers and institutional investors were shying away from the market because of growing speculative moves in some shares.
Softbank Corp, the most heavily traded issue by value on the main board, ended down 4.38 percent at 6,120 yen, after jumping 6.7 percent earlier.
Yahoo Japan Corp, owned 42 percent by Softbank, also had a bumpy ride. Yahoo Japan was down 1.15 percent at 1.72 million yen, after rising as high as 1.91 million yen in the morning.
"There is too much speculative trade going on in the market. It's one big money game, influenced by active trades through the Internet," said Katsuhiko Kodama, head of the equities section at Toyo Securities Co Ltd.
Investors had bought non-exporters on optimism about Japan's economic recovery but unloaded brokers such as Nomura Holdings Inc and Nikko Cordial Corp
"The speed at which the market has risen has been too rapid. So it's natural for the market to enter a correction phase," said Koichiro Suzuki, a manager at investment department of Sompo Japan Asset Management.
"I think the market will fall a bit further," added Suzuki, who expects the Nikkei to hold at least above the 10,000 yen level.
The Nikkei closed down 1.29 percent at 10,889.62, adding to a 1.17 percent fall on Tuesday. The broad-based TOPIX index fell 1.79 percent to 1,073.75.
The Nikkei reached a 16-month intraday high of 11,238.63 on Tuesday morning, but pulled back as investors worried about its rapid nine percent rise since the start of October.
The TOPIX was also dragged down mainly by selling in banks such as Mizuho Financial Group Inc, the world's largest bank by assets, which fell 7.33 percent at 278,000 yen, and UFJ Holdings Inc, which also fell 7.56 percent to 489,000 yen.
Selling in brokers also weighed on the market, with top brokerage Nomura Holdings down 3.92 percent to 1,913 yen, adding to a 3.82 percent fall on Tuesday. Third-ranked Nikko Cordial eased 4.18 percent to 687 yen, down for the second straight day after seven sessions of rises.
Technology shares also could not escape the bearish sentiment, with NEC Corp losing 2.41 percent to 931 yen after reaching a 2003 high of 988 on Tuesday.
Fujitsu Ltd and Sharp Corp also both came off from 2003 year highs hit on Tuesday, Fujitsu slipping 3.5 percent to 690 yen and Sharp sagging 0.88 percent to 1,804 yen.
Trading volume slowed, with 1.29 billion shares changing hands on the first section, the lowest total since October 9. Decliners outnumbered gainers 1,134 to 288.
EYEING ON FOREIGN INVESTORS
Suzuki of Sompo Japan Asset Management said the key to seeing where the market will head next would be foreign investors, who have a significant presence in the Japanese stock market.
For the April-September period, foreign investors accounted for some 50 percent of turnover and bought a net six trillion yen ($54.77 billion) worth of shares, poised to break the record for a full financial year of 7.5 trillion yen set in 1999/2000.
"The volume they handle is much bigger than Japanese investors," Suzuki said. "In order to gauge foreign investors' sentiment, you have to watch how the U.S. market performs."
For now however, earnings results dictate investment decisions for some shares.
Yamaha Corp was up 2.68 percent at 2,300 yen after the world's largest musical instruments maker raised its parent-only net profit forecast for the half year to September by 37.1 percent to 19.2 billion yen.
Trend Micro Inc jumped 5.03 percent to 3,340 yen after the anti-virus software maker on Tuesday posted a 31.3 percent year-on-year rise in group net profit for July-September to 2.34 billion yen.
Meanwhile, investors agreed that some dealers and institutional investors were shying away from the market because of growing speculative moves in some shares.
Softbank Corp, the most heavily traded issue by value on the main board, ended down 4.38 percent at 6,120 yen, after jumping 6.7 percent earlier.
Yahoo Japan Corp, owned 42 percent by Softbank, also had a bumpy ride. Yahoo Japan was down 1.15 percent at 1.72 million yen, after rising as high as 1.91 million yen in the morning.
"There is too much speculative trade going on in the market. It's one big money game, influenced by active trades through the Internet," said Katsuhiko Kodama, head of the equities section at Toyo Securities Co Ltd.
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