TOKYO, Feb. 26 (Xinhua) -- Tokyo stocks lost ground Wednesday, with the benchmark Nikkei stock index dropping 0.54 percent as concerns about consumer confidence in the United States following the market's rise yesterday, saw investors look to secure profits rather than chase riskier assets higher.
Local traders said that data showing that U.S. consumer confidence fell slightly in February, owing to fears about the outlook for business conditions and jobs in the near future, urged some investors to take profits following the market's closing high a day earlier and ahead of U.S. GDP data out soon and slew of marcroeconomic data, including CPI, due out from Japan Friday.
The U.S.Conference Board said Tuesday that its confidence index slipped to 78.1 this month, down from 79.4 in January, with Lynn Franco, director of economic indicators at the Conference Board stating that, "Consumers believe the economy has improved, but they do not foresee it gaining considerable momentum in the months ahead."
Consumer sentiment in the world's largest economy is a closely watched barometer for indications of the impact of spending on the economy, which accounts for around 70 percent of its entirety.
But brokers here said that some investors were taking a broader view, and eyeing the U.S. Fed's plans to continue to taper its stimulus measures and the Bank of Japan's moves to possibly further ease its monetary policy as the nation faces a consumption tax hike from 5 to 8 percent in April and inflation goal target of 2 percent in two years.
Toshikazu Horiuchi, an equity strategist at IwaiCosmo Securities Co., noted that the market's rise was prevented Wednesday, but added that its downside was firm on current moves from the central banks. He added that stocks here are not overvalued when taking into account some fairly robust corporate earnings results of late.
Other analysts noted that some investors were risk adverse as the yen didn't significantly fall against its major counterparts.