Tokyo ends down after sharp reverse as Asia markets mostly slip

HONG KONG (AFP) – Japanese stocks ended the day in the red as it suffered a sharp reverse in afternoon trade after hitting fresh 26-year highs, with most other Asian markets also falling.

The Nikkei had ploughed two per cent higher in the first session, supported by broad optimism in the global economy and healthy corporate results that have helped fuel a run across global equities.

However, analysts said investors had decided the rally was running a little too hot – Tokyo has piled on more than 20 per cent since early September – and turned sellers in the afternoon.

The index closed down 0.2 per cent, having fallen as much as 1.7 per cent at one point in afternoon trade.

Seoul also ended down, losing 0.1 per cent, Singapore shed the same amount in the afternoon, while Wellington, Taipei, Bangkok and Jakarta were all lower.

People walk in front of an electronic stock board showing the Hang Seng Index at a bank in Hong Kong. – AP

However, Shanghai closed 0.4 per cent higher while Hong Kong was 0.8 per cent up, with traders cheering forecast-beating inflation figures from China that provided fresh hopes the huge economy is stabilising.

Sydney was up 0.6 per cent.

The dollar also suffered an afternoon retreat after holding up against its major peers.

Dealers were keeping tabs on Trump’s tax plans as Senate and House Republicans remain at odds over some issues including when cuts should be introduced and the target for the national deficit increase.