TOKYO, May 14 (Xinhua) -- Japan's Nikkei stock index closed 0. 14 percent lower Wednesday as investors opted to lock in profits following the market's recent gains, but losses were capped by solid performances on bourses in the U.S. and Europe overnight.
The Nikkei Stock Average dropped 19.68 points from Tuesday to close at 14,405.76, while the broader Topix index added 4.80 points, or 0.41 percent, to finish at 1,183.15.
Brokers here said that trade remained thin, however, among a lack of fresh incentives and now that many major firms here have released their earnings and future guidance, further results from Japan Inc. have largely been factored in and investors are hitting the sidelines as the market is somewhat directionless.
"As we near the end of earnings season, I'm hoping that volatility subsides and we can start to get more of a direction for stocks. There was a lot of concern that company forecasts would be conservative, but that has mostly been priced in, so the risks are receding," said Takashi Aoki from Mizuho Asset Management Co.
Other analysts concurred, saying that profit taking was rife following the market's surge the previous day and once gains were locked in investors hit the sidelines amid a lack of new incentives.
"As Japanese shares made big gains the previous day and corporate earnings announcements have gotten into full swing, there is a wait-and-see mood keeping trading subdued," Masashi Akutsu, an equity strategist at SMBC Nikko Securities Inc. said.
Heavily weighted issues lost ground Wednesday, with Fast Retailing, owner and operator of the Uniqlo chain of apparel stores, retreating 0.7 percent to 32,445 yen.
Mobile phone and services provider Softbank, another heavy- hitter, lost 0.6 percent to close the day at 7,234 yen.
But real estate and developer issues found traction, with Sumitomo Realty & Development Co. jumping 4.1 percent to 4,315 yen, on a profit forecast that beat analysts' estimates and Mitsubishi Estate Co. advanced 2.2 percent to 2,501 yen. Mitsui Fudosan Co, meanwhile, also closed in positive territory, gaining 1 percent to close at 3,306 yen.
Kubota, an Osaka-based heavy equipment manufacturer, was a notable advancer, climbing 5.9 percent to 1,420 yen, after reporting its full-year net income had rocketed way beyond median analysts' expectations, jumping 69 percent to 131.7 billion yen, with its net income for the current fiscal year also coming in above market forecasts.
Financial issues ended mixed, with Mitsubishi UFJ Financial Group Inc. falling 0.7 percent to 574 yen, while Sumitomo Mitsui Financial Group Inc. also dropped 0.7 percent to 4,185 yen. But Mizuho Financial Group Inc. found favor, closing up 0.5 percent to 204 yen.
Consumer electronics giant Sony Corp. advanced 1.1 percent today, prior to reporting after the bell it forecasts an unexpected annual loss of 50 billion yen for the year ending March. In stark contrast, analysts had predicted the firm would net more than 57 billion yen in profit.
Camera maker Nikon lost ground, falling 4 percent to 1,567 yen, following the firm reporting a net income of 46.8 billion yen for last fiscal year and missing its own target.
Trading volume on Wednesday dropped to 1.92 billion shares on the Tokyo Exchange's First Section, down from Tuesday's volume of 1.99 billion shares, but advancing issues still outnumbered declining ones by 1,024 to 644.