Stocks Closing UPDATE1

(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, Jan. 8 -- (Kyodo) _ (EDS: ADDING DETAILS, PRICES) Tokyo stocks fell for the second consecutive day Tuesday following their recent fast-paced rally as the yen's rebound prompted investors to sell recently bought export-oriented shares.

The 225-issue Nikkei Stock Average ended down 90.95 points, or 0.86 percent, from Monday at 10,508.06. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 9.18 points, or 1.04 percent, lower at 871.88.

The dollar largely changed hands in the mid-87 yen range Tuesday, down from the upper 87 yen level seen in New York overnight, leading investors to sell automakers and electronics makers.

By sector, major decliners included real estate, securities and insurance shares, while gainers included land transport companies, service providers and food companies.

Brokers said the halt in the yen's weakness drove investors to lock in gains but that the downside was limited by hopes for an improvement in the Japanese economy after the recent change of government.

"Ahead of the detailed compilation of the government's economic stimulus measures and the Bank of Japan policy meeting later in the month, investors sold off" some of the shares they have bought, Masatoshi Sato, chief strategist at Mizuho Securities Co., said.

The downside of the Tokyo market was also supported by news reports that the government of Prime Minister Shinzo Abe is mulling economic stimulus measures worth some 20 trillion yen that would include work to reconstruct areas affected by the March 2011 disaster, said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co.

Automakers lost ground, with Toyota Motor falling 85 yen, or 2.0 percent, to 4,100 yen and Mazda sliding 9 yen, or 5.0 percent, to 171 yen.

Real estate shares fell back after sharp gains in recent trading with Sumitomo Realty & Development slipping 154 yen, or 5.2 percent, to 2,790 yen and Mitsui Fudosan falling 78 yen, or 3.7 percent, to 2,041 yen, brokers said.

Aozora Bank extended its losses, falling 10 yen, or 4.0 percent, to 240 yen, following its announcement that U.S. investment fund Cerberus Group, its largest shareholder, will sell most of its stake in the lender.

Bucking the trend was Sharp, gaining 11 yen, or 3.9 percent, to 293 yen after the company's president said the firm is likely to perform better than it previously expected in the October-December period.

Domestic demand-driven shares attracted buying among laggards, with parcel transporter Yamato Holdings adding 22 yen, or 1.6 percent, to 1,376 yen and East Japan Railway rising 80 yen, or 1.4 percent, to 5,730 yen.

On the First Section, declining issues outnumbered advancing ones 1,013 to 565 while 116 ended unchanged.

Trading volume slightly decreased to 3,519.54 million shares from Monday's 3,531.76 million shares.

(c) 2013 Kyodo News International, Inc.

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