TOKYO, June 16 (Xinhua) -- Japan's benchmark Nikkei stock index closed lower on Wednesday as chip-related issues followed their U.S. peers lower overnight, while investors opted to take profits ahead of the outcome of the U.S. Federal Reserve's policy meeting.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, edged up 0.38 point, or 0.02 percent, to finish at 1,975.86.
Brokers here said that Wall Street lost ground overnight ahead of the Fed's policy meeting as inflation concerns have sparked some jitters about the central bank tapering its stimulus measures early.
They added however that cyclical issues such as shipping firms fared well on hopes for the full reopening of the economy as vaccination rollouts, including Japan's, gather steam.
"Many investors are holding their bets as they await the outcome of the Federal Reserve meeting, but cyclical stocks that are set to benefit in the post-pandemic era are solid," Yutaka Miura, senior technical analyst at Mizuho Securities, was quoted as saying.
Other strategists noted that following the market's two-day rally some stocks were ripe for profit-taking amid a lack of other definitive cues and uncertainty ahead of the Fed's meeting.
"Investors were unable to make large moves as they adjusted positions ahead of the Fed meeting, although some moved to lock in gains after a two-day rally," Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co., was quoted as saying.
He added, however, the Fed moving to taper its stimulus measures earlier than expected was unlikely.
As for the currency market, the dollar dropped to the upper 109 yen zone and was quoted at 109.93-94 yen compared with 110.01-11 yen in New York and 110.04-05 yen at 5 p.m. on Tuesday in Tokyo.
The euro, meanwhile, fetched 1.2132-2133 dollars and 133.37-41 yen against 1.2121-2131 dollars and 133.43-53 yen in New York and 1.2143-2145 dollars and 133.62-66 yen in late Tuesday afternoon trade in Tokyo.
Among chip-linked stocks following their U.S. peers lower, Advantest lost 0.19 percent, while Tokyo Electron dropped 1.1 percent.
Material maker Unitika weighed heavily, falling 3.4 percent, while health care website operator M3 ended the day 2.7 percent lower.
Battery manufacturer and supplier GS Yuasa retreated 3.2 percent, with Sony Group another heavy loser, ending 2.9 percent lower.
Issues sensitive to domestic demand found favor on hopes the increased pace of Japan's vaccination rollout will lead to a quickening of the country's economic reopening.
As such, department store operators advanced, with Takashimaya adding 2.1 percent, while Isetan Mitsukoshi Holdings gained 0.2 percent.
Cyclical issues advancing included shipping firm Kawasaki Kisen Kaisha rising 4.9 percent and among energy-oriented issues Inpex leapt 3.7 percent, following a spike in oil prices to a more than two-year high.
Issues that rose outpaced those that fell by 1,213 to 876 on the First Section, while 105 ended the day unchanged.
On the main section on Wednesday, 1,028.48 million shares changed hands, rising from Tuesday's volume of 972.79 million shares.
The turnover on the third trading day of the week came to 2,426.28 billion yen (22.07 billion U.S. dollars).