Stocks plunged on the Tokyo Stock Exchange Friday, hurt by a wave of profit-taking.
The benchmark Nikkei 225 average sank 186.87 points, or 0.92 percent, to close at 20,033.44. On Thursday, the key market gauge gained 89.89 points.
The Topix, including all first-section issues, finished down 12.17 points, or 0.75 percent, at 1,611.90, after climbing 9.70 points the previous day.
Tokyo stocks met with heavy selling to lock in profits following their recent advance and a plunge on Thursday in U.S. equities, also hit by profit-taking, brokers said.
Additionally, the dollar’s fall below ¥112 battered investor sentiment, pushing down the Nikkei average below the 20,000 line for most of Friday’s session, brokers said.
The Tokyo market came under profit-taking pressure triggered by overnight falls in U.S. and European stocks, after attracting purchases recently “despite the lack of outstanding buying incentives,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co.’s Economic Research Department.
But the market’s downside was underpinned by hopes for exchange-traded fund purchases by the Bank of Japan, Ichikawa also said.
Some investors sold shares to adjust their positions prior to the Tokyo metropolitan assembly election on Sunday, said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co.
Otsuka predicted that expectations for brisk earnings at major companies will continue to help maintain the market’s firmness even if the outcome of the closely watched election has negative effects on the market.
Falling issues far outnumbered rising ones 1,409 to 490 in the TSE’s first section, while 123 issues were unchanged.
Volume slightly grew to 1.968 billion shares from Thursday’s 1.950 billion shares.
Selling to lock in profits hit mobile game site operator Gree and smartphone game developer KLab after their recent surge.
The stronger yen pushed down such export-oriented names as automakers Toyota and Honda and technology firms Hitachi, Panasonic and Kyocera.
Other major losers included Nintendo and SoftBank Group.
By contrast, Sumitomo Mitsui and Dai-ichi Life attracted purchases on the back of higher U.S. interest rates.
Also on the plus side were Awa Paper Mfg. and Sumitomo Chemical.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average plunged 220 points to 19,990.