Japan’s Nikkei falls 1% from record as investors book profits

Japan’s Nikkei stock average fell 1% on Wednesday as investors booked profits following a rally that took the gauge to record levels last session. The Nikkei fell 1.06% to 51,961.98, while the broader Topix fell 0.77% to 3,511.34.The Nikkei rose 4% in the first two sessions of the year and hit a record high on Tuesday.

The market also weighed the impact of China’s ban on the export of dual-use items to the country. “China’s export ban was a negative signal, but overall investors sold stocks as the market rose sharply over the past two sessions,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.’But the money circulated. The selloff was focused on large stocks, and smaller stocks were firm.”

The Topix small-cap index rose 0.39%. About 55% of stocks on the main Tokyo Stock Exchange (TSE) market rose, while 41% fell and 3% were flat.

China

has banned the export to Japan of dual-use items that could be used for military purposes, according to the Commerce Ministry statement on Tuesday. Dual-use items are goods, software or technologies that have both civilian and military applications, including certain rare earth metals that are essential for making drones and chips.

Automakers Toyota Motor and Honda Motor each fell more than 2%.

Shares of Toyo Engineering, a developer of offshore rare earth mining technology, rose nearly 20% on Wednesday to an exchange-imposed daily limit of 4,285 yen.

On the other hand, chip testing equipment maker Advantest fell 4.4%, dragging the Nikkei down the most.

Uniqlo brand owner Fast Retailing fell 2.74%. Hisamitsu Pharmaceutical also rose 19.23% to a daily limit of 6,200 yen after the company said it planned to take the company private through a management buyout for nearly 400 billion yen.