Roundup: Nikkei edges down 0.10 pct on yen's rise, profit-taking

The Nikkei stock index closed down 0. 10 percent Wednesday as buying ran its course following investors having fully digested testimony from U.S. Federal Reserve Chair Janet Yellen on interest rates.

The Nikkei 225 index lost 18.28 points from Tuesday to close the day at 18,585.20, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 0.66 point, or 0.04 percent, to end the day at 1,507.62.

Yellen gave a fairly upbeat assessment of the U.S. economy in her congressional testimony and other indications, analysts here said, suggesting that the Fed was eyeing an interest rate hike later this year.

Based on her testimony, local analysts said that an interest rate hike would be unlikely before June, despite prior suggestions of a middle-of-the-year increase and the likelihood would be that the Fed would deliberate rate hikes on a monthly meeting basis, as Yellen reiterated the Fed's pledge to be "patient."

"The market was fearing a rate hike in June, but there's more confidence now after the chair's reference to inflation that the hike will be delayed," Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc., said.

Local brokers also said that the market swung in and out of positive territory during trading hours, with some investors opting for profits made following the market's recent winning streak recently, but eventually closed lower as with the rising yen being a turnoff and Greece's debt situation still not a hundred percent resolved, investors were hitting the sidelines to await new cues, with market players suggesting the market was beginning to look a little top heavy in the short-term.

Eurozone finance ministers have provisionally approved reform proposals submitted by Greece for it to obtain a four-month emergency extension to its bailout program, which will enable Athens to avoid a default and stay in the single currency union.

But Greece's creditors said that while the new reforms "had averted a serious crisis" some of the points needed further clarification and assurances and Athens would have to go back and elucidate on these points.

Nevertheless, the consensus among Greece's creditors was that procedures toward the extension being granted would begin and the reforms submitted meant that Athens was serious enough about further discussions with the Eurogroup about its financial predicament.

On currency markets, the U.S. dollar dropped to 118.71 yen from 118.94 yen logged in New York on Tuesday, meaning issues with a wide exposure to overseas markets came under pressure as they rely on a weaker yen to boost their competitiveness and profitability when funds are repatriated.

But consumer electronics maker Sony managed to rise 0.12 percent to close at 3,280.0 yen and Mitsubishi Heavy Industries gained 0.13 percent to end at 660 yen, following reports of a tie up with a firm in Britain to supply wind turbines.

Mobile communications firm SoftBank added 2.95 percent to 7,315 yen, but Fast Retailing, operator of the Uniqlo chain of high street apparel stores, slipped 0.5 percent to 44,905 yen as its shares went ex-dividend.

Pachinko machine maker Sankyo slumped 6.2 percent to 4,505 yen, falling the most in a year, as it slashed its net-income forecast for the year by 42 percent citing a slowdown in sales.

Central Japan Railway was another notable loser Wednesday, dropping 3.7 percent to 22,195 yen, while Toyo Construction tumbled 9.6 percent to 539 yen, after it announced plans to raise capital through a third party share issuance.

Among retailers, Aeon retreated 1.3 percent to 1,286 yen and Seven & i Holdings lost 0.6 percent to end the day at 4,514 yen, owing to the ex-dividend effect.

Trading volume on Wednesday dropped to 2.21 billion shares on the Tokyo Exchange's First Section, down from Tuesday's volume of 2.32 billion shares, with advancing issues just outpacing declining ones by 888 to 825. Endi