Tokyo stocks finished mixed Tuesday as profit warnings from some firms spread caution while automakers and high-technology leaders gained as the dollar rose against the Japanese yen.
The benchmark Nikkei Stock Average of 225 selected issues fell 9.43 points, or 0.08 percent, to close at 11,490.43 points. The index gained 139.46 points, or 1.23 percent, on Monday.
The dollar was trading at 105.25 yen at 5 p.m. Tuesday, up 0.95 yen from late Monday in Tokyo and also above the 104.79 yen it bought in New York later that day.
Local export-related issues were helped by the strengthening dollar, which tested the key 105-yen level in U.S. trading. Japanese exporters benefit from a stronger dollar, which helps boost the value of their overseas earnings.
Major automakers like Nissan Motor Co., Honda Motor Co. and Toyota Motor Corp. advanced.
Chip testing equipment maker Advantest Corp. rose 0.3 percent while Sony Corp. gained 1.3 percent.
Profit warnings from some companies weighed on shares, however.
Toray Industries Inc., which revised down its group net profit outlook for this fiscal year, fell 1.7 percent.
Electronic components maker TDK fell 0.9 percent, while Fanuc, a top maker of automated machine tools, lost 1.0 percent. Pharmaceutical issues also dropped.
Still, investors were somewhat bullish on the outlook.
"If the investors get a bit discouraged by October-December (gross domestic product) figures due next week, the Nikkei may fall as low as 11200, but given the overall mood for further gains because of continued stock buying by foreign investors, it may rise toward 11800," said Tsuyoshi Nomaguchi, strategist at Daiwa Securities.
The broader TOPIX, the index of all issues on the Tokyo Stock Exchange's first section, gained 1.00 points, or 0.09 percent, to finish Tuesday's trading at 1,155.42 points. The TOPIX added 8.91 points, or 0.78 percent, on Monday.
On the TSE's First Section, 841 issues fell, 627 issues rose, and 135 were unchanged from Monday.
Volume rose to an estimated at 1.870 billion shares from 1.681 billion shares Monday.
In New York Monday, stocks dipped lower as investors worried about the market's ability to hold its gains after last week's rally.
The Dow Jones industrial average fell 0.37, or 0.01 percent, to 10,715.76 after a 123-point gain Friday. The Nasdaq composite index lost 4.63, or 0.22 percent, to 2,082.03.
In currency trading, the U.S. dollar rose against the Japanese yen and euro, extending gains from an overnight rally prompted by a U.S. President George W. Bush's proposal for a leaner budget in fiscal 2006.
"The budget plan helped improve traders' sentiment for the dollar, which had already been boosted by the weekend G7 (Group of Seven) related events," said Minoru Shioiri, senior manager of foreign exchange at Mitsubishi Securities.
In Tokyo, the euro slipped to $1.2769 late Tuesday from $1.2850 late Monday. Against the Japanese currency, the euro rose 134.54 yen from 134.06 yen.
The yield on Japan's benchmark 10-year government bond rose to 1.3250 percent, from Monday's finish of 1.3150 percent. Its price fell 0.08 to 99.78 points.