Tokyo stocks fell Monday on profit-taking as investors were unnerved by rising global oil prices and an unclear outlook for Wall Street's direction. The U.S. dollar was up against the Japanese yen and the euro.
The Nikkei Stock Average of 225 selected issues lost 56.09 points, or 0.48 percent, to close at 11,667.54 points. The index gained 54.68 points, or 0.47 percent, Friday.
The dollar was trading at 107.90 yen at 5 p.m., up 0.63 yen from late Friday in Tokyo and also above the 107.61 yen it bought in New York later that day. The dollar traded between 107.59 yen and 108.07 yen in Tokyo.
On the stock market, traders said lingering jitters about rising global oil prices and an unclear outlook for U.S. stocks prompted profit-taking in economy-sensitive stocks, including banks and retailers.
"The current correction phase is likely to continue this week to gauge the outlook for U.S. stocks and interest rates," said Masaaki Higashida, deputy general manager at Nomura Securities Co.
Light, sweet crude for May contracts had risen 29 cents to $57.56 a barrel on the New York Mercantile Exchange as of midday in Asia. The benchmark commodity reached a record high of $57.70 a barrel on Friday.
But the Tokyo market's downside was limited as cautious optimism remained about domestic institutional investors starting to accumulate blue chips as the new Japanese fiscal year started last Friday, traders said.
Warehouse operators were the biggest decliners, succumbing to profit-taking after recent gains. Mitsubishi Logistics Corp. shed 3.2 percent and Sumitomo Warehouse Co. lost 3.9 percent.
Financial stocks Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. also fell, as did department store Mitsukoshi Ltd. and supermarket chain Ito-Yokado Co. Real estate stocks Mitsui Fudosan Co. and Mitsubishi Estate Co. also declined, along with telecoms KDDI Corp. and NTT DoCoMo Inc.
The broader TOPIX, which includes all issues on the Tokyo Stock Exchange's first section, shed 3.35 points, or 0.28 percent, to finish Monday's trading at 1,183.15 points. The TOPIX rose 4.32 points, or 0.37 percent, Friday.
First-section volume fell to 1.386 billion shares from Friday's 1.471 billion shares. Declines beat advancers 1,013 to 524, while 107 issues were unchanged.
On Wall Street, U.S. stocks fell sharply Friday due to renewed inflation fears prompted by strong growth in the service sector and record-high oil prices.
The Dow Jones industrial average fell 99.46 points, or 0.95 percent, to 10,404.30. The Nasdaq composite index dropped 14.42 points, or 0.72 percent, to 1,984.81.
In currency trading, the dollar held steady against the yen in Asia Monday near a five-month high, as players squared their positions on the U.S. currency due to a lack of new trading cues.
Early in trading, Japanese mutual funds bought the American currency for yen to invest in U.S. assets at the start of the new fiscal year in Japan, which began April 1.
The dollar also got a temporary boost versus the yen after Japan's Ministry of Finance unveiled guidelines for the first time on its policy for managing the country's foreign exchange reserves.
The dollar gained ground after a ministry official told reporters the government manages its reserves to ensure liquidity and not to ensure high returns on assets.
The euro slipped to $1.2897 late Monday afternoon from $1.2972 late Friday and rose to 139.20 yen from 139.15 yen.