Japanese equities closed in negative territory on Monday, reversing early gains after the benchmark briefly crossed the 60,000 level, as profit-taking set in following a tech-led rally and easing geopolitical risk tied to the extended Iran-U.S. ceasefire.
The Nikkei 225 ended 0.75% lower, or fell 445.63 points, to close at 59,140.23.
The decline came as investors reassessed geopolitical risks and tracked softer U.S. futures, despite no further escalation in the Middle East.
The Nikkei 225 briefly hit a record 60,013.98, with early gains supported by an extended Iran-U.S. ceasefire. While the ceasefire was prolonged following mediation efforts, tensions persisted as a U.S. naval blockade remained in place and Iran seized two vessels in the Strait of Hormuz.
In economic news, Japan's private sector growth slowed to a four-month low in April as a surge in manufacturing-driven by supply concerns-was offset by softer services activity, with the S&P Global Flash Japan PMI Composite Output Index easing to 52.4 from 53.
Rising input costs linked to energy and a weak yen pushed prices higher, while business confidence fell to its lowest level since August 2020 amid Middle East uncertainty.
On the corporate front, Japan Petroleum Exploration (TYO:1662) rose 9% after outlining plans to boost oil and gas output to 180,000 bpd by 2035 with a 1.16 trillion yen investment, shifting focus toward energy security.
Toyota Motor (TYO:7203) fell 2% after a report said it is reviewing a potential data breach involving seconded staff from insurers under Tokio Marine (TYO:8766) and MS&AD Insurance Group (TYO:8725).
Note (TYO:5243) dropped 8% after its founder sold 2.8% of outstanding shares in a move aimed at improving stock liquidity.