Tokyo stocks fall after crossing key 20,000 level

Tokyo's benchmark stock index fell Wednesday, slipping from above the key 20,000 level on profit-taking as disappointing US and Chinese manufacturing figures dented sentiment.

Markets have been hit by a double whammy this week after figures that showed a gauge of Chinese manufacturing activity hit a three-year low in November were followed by news that US factory output contracted.

The Institute for Supply Management purchasing managers' index for the manufacturing sector dropped to 48.6 in November, marking the first contraction in three years.

The disappointing results throw the focus on US employment figures on Friday as the Federal Reserve moves closer to a long-awaited interest rate hike.

"The ISM manufacturing figures were terrible. They were at a level indicating a recession," Chihiro Ohta, general manager of investment information at SMBC Nikko Securities, told Bloomberg News.

"The market's focus is shifting to the pace of rate hikes in the US. That pace is likely to be gradual as the American economy doesn't seem to be as strong as expected.

"The Nikkei 225 rose above 20,000 yesterday, but we're not in a situation where we want to make large purchases," Ohta added.

By the close, the Nikkei 225 at the Tokyo Stock Exchange fell 0.37 percent, or 74.27 points, to 19,938.13.

The broader Topix index of all first-section shares was flat, edging up 0.02 percent, or 0.31 points, to 1,602.26.

Investors are also eyeing a speech in Washington by Fed Chair Janet Yellen later in the day for additional hints about the pace of a rate increase.

A European Central Bank meeting Thursday was being eyed amid speculation that it could unleash further monetary easing to boost growth in the sagging eurozone economy.

In share trading, Toyota ended 0.75 percent higher at 7,820 yen, banking giant Mitsubishi UFJ gained 0.48 percent to 808.6 yen, while Sony was down 1.83 percent to 3,168 yen.

Market heavyweight Fast Retailing fell 1.82 percent to 48,980 yen in morning trade.

Energy giant JX Holdings slipped 0.18 percent to 503.3 yen as it announced it was in merger talks with smaller rival TonenGeneral Sekiyu.

On currency markets, the dollar rose to 123.10 yen from 122.86 yen Tuesday in New York.

The euro bought $1.0609 and 130.60 yen against $1.0634 and 130.65 yen in US trade.

pb/iw